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Microsoft Posts Lower Sales, Earnings

Redmond, Wash. — Microsoft reported revenue of $13.7 billion for the third quarter, ended March 31, a 6 percent decline from the same period the prior year, and lower income for the quarter.

Operating income was down 3 percent to $4.44 billion, and net income was off a substantial 32 percent to $2.98 billion compared with last year’s third quarter.

The financial results for the third quarter included $290 million of severance charges related to the previously announced plan to reduce up to 5,000 positions and $420 million of impairments to investments.

Revenue in Client, Microsoft business division, and server and tools was negatively impacted by weakness in the global PC and server markets. Revenue from enterprise customers remained stable during the quarter.

“With our continued R&D investment and our broad suite of products and services, we remain in a great position to compete and gain share in the marketplace,” said Kevin Turner, COO at Microsoft. During the quarter, Microsoft released the beta version of the Windows 7 operating system, which remains on track for a fiscal year 2010 launch. Development milestones were achieved on other products, including Microsoft Office 2010, Windows Server 2008 R2 and Windows Mobile.