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Microsoft Earnings

Microsoft Earnings

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Ten Attributes of the Smarter Operating SystemTen Books for Smarter Geek Summer Reading Dell's $3 Million TweetHow to Tame Digital ContentSmart Security Choices for Mobile WorkersHow to Select Server Processors to Reduce Total CostsSee All Resources > ��WindowsMicrosoft Earnings Fall Sharply Ahead of Windows 7 Launch Article Rating:�/�1 By: Nicholas Kolakowski 2009-07-23There are 0 user comments on this Windows story.Rate This Article: Poor Best E-mail� Print PDF VersionMicrosoft felt the effects of the global recession, including declines in the PC and server markets, as its earnings declined 17 percent from the same quarter in 2008.

Although Microsoft came in below Wall Street Estimates with $13.10 billion in quarterly revenue, it can look forward to a possible earnings bump later in 2009 with the release of Windows 7 and Windows Server 2008.Microsoft took a hit to it earnings during its fourth financial quarter of 2009, reporting a 17 percent decline in year-over-year revenue.

Overall, Microsoft earned $13.10 billion for the quarter, coming in more than $1 billion below Wall Street estimates.

Although Microsoft hit several technical milestones during the quarter, including the rollout of the Windows 7 and Windows Server 2008 release candidates, it will not see revenue on those products until later in the year.

The deferring of revenue related to the Windows 7 Upgrade Option program, announced on June 25, dragged down earnings per share by 2 cents.

"Our business continued to be negatively impacted by weakness in the global PC and server markets," Chris Liddell, Microsoft�s chief financial officer, said in a statement before the July 23 earnings call.

"In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter." During the earnings call, Liddell re-emphasized that the quarter had been "difficult but encouraging." "I do feel better about our relative performance," Liddell added.

"We actually executed much better across all aspects of our business." He also noted that the company had seen signs of overall economic improvement: "We have begun to see sequential stabilization in some our key businesses�I�m very pleased with the way in which we are responding to the environment." Resource Library:Heading into the call, earnings for the current quarter were estimated at 36 cents a share on revenues of $14.37 billion, representing a year-over-year drop of 9.3 percent.

For the same quarter in 2008, Microsoft earned 47 cents a share on $15.84 billion in revenue.

Earlier in the year, Microsoft posted its first-ever quarterly revenue decline, with a handful of its business units showing significant drops in revenue.

Overall for the fiscal year ended June 30, Microsoft reported revenue of $58.44 billion, down 3 percent from the prior year.

Even as its revenues decline, Microsoft is in the midst of readjusting its corporate strategy in the face of a rapidly changing IT paradigm.

Whereas in previous years the company could rely on its desktop dominance to ensure revenues and profitability, the increased prevalence of cloud-based platforms and applications such as Google Apps obviously has Redmond somewhat concerned that its model could become outdated.

To combat that, Microsoft has readjusted its strategy to embrace the cloud, particularly with regard to Office 2010, which it will offer as a free online service to subscribers of Microsoft Live.

However, the online versions of Word, Excel, OneNote and PowerPoint will be somewhat more stripped-down from the full versions.

Microsoft will also offer a hosted subscription service and on-premises versions of Office 2010 for those SMBs (small- to medium-sized businesses) and enterprise not will to move into the cloud in one shot.

Microsoft will also potentially be facing a new Web-based operating system, Google Chrome OS, scheduled to release in the second half of 2010.

Although designed to run on less-powerful mini-notebooks, known popularly as "netbooks," the prospect of an operating system released by one of Microsoft�s prime Web competitors had a number of media outlets prematurely predicting Redmond�s imminent demise.�
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