Microsoft Posts First Annual Calendar Sales Drop in Its History

From DailyTech: Microsoft's track record of late has been mixed. While its Xbox 360 sells relatively well and has an excellent game-attach rate, it is still overshadowed in total sales by the Nintendo Wii. Microsoft's Zune has failed to generate significant market share, but it has managed to develop a small but loyal following and a significant amount of hype over its upcoming OLED touchscreen model.

However, Microsoft's core business has always been operating system sales, and the economy has hit that sector hard. Facing declining PC and server shipments, Microsoft saw its sales drop on a year-to-year basis for the first time in its history (Microsoft just ended its fiscal Q4 2009, closing the year). Only once before had Microsoft experienced even a quarterly drop -- which happened to be last quarter, calendar Q1 2009.

Quarterly sales saw a big decline, dropping to $13.1B USD, down 17 percent from $15.84B USD last year. Profit for the quarter was down 29 percent to $3.05B USD. Profits were hurt by the Windows 7 upgrade program, legal charges, suffering investments, and the need to pay its laid off employees severance benefits.

Chris Liddell, chief financial officer at Microsoft comments, "Our business continued to be negatively impacted by weakness in the global PC and server markets. In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter."

Microsoft posted $58.44B USD in yearly sales and $14.57B USD net profit, down from $60.42B USD and $17.68B USD net profit in calendar Q2 2008 (Microsoft's fiscal Q4 2008).

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