The link between Microsoft’s fortunes and the health of the PC market saw the software maker’s fiscal third quarter revenue fall year-over-year for the first time in Microsoft’s 23-year history. Earnings were down 32 percent.
Four of Microsoft’s five business divisions recorded lower sales, led by a 16 percent decline in the Windows OS business to $3.4 billion in the wake of the Vista debacle. Microsoft executives also blamed the drop on a general pullback in spending on PCs by both consumers and businesses.
Microsoft did not issue earnings guidance for the rest of the year or any hope for a rebound in this quarter.
In the quarter ended March 31, profit totaled $2.98 billion. In the same quarter last year, Microsoft earned $4.39 billion.
Microsoft’s accounts included a $290 million charge for severances after cutting 5000 jobs and it also wrote down $420 million on investments.
Revenue in the last quarter slipped 6 percent to $13.6 billion. Even so, Microsoft shares gained 3 percent in extended trading after the earnings report.
