James Delahunty
23 Apr 2009 20:29
Microsoft Corp. has revealed a 32 percent drop in quarterly profit, but saw its share price rise on news of Windows 7 being on track for a fiscal 2010 release, and its ongoing cost cutting measures to fight the global recession. "While we would all like to think that our recovery will be soon and painless, we unfortunately believe that it will be slow and gradual," Chief Financial Officer Chris Liddell said on a conference call.
The company revealed it expected weakness in the personal computer, server and hardware markets to continue for at least another quarter, in contrast to Intel's belief that the worst is already over. The company's 6 percent drop in revenue for the March quarter was the first time in its history that it marked a year-on-year decline.
It has cut operating expenses by 9 percent. "It's good to see that they are controlling their costs because that's within their sphere of control. They can't really do a lot about demand," said Kim Caughey at money manager Fort Pitt Capital Group. "They have a nice product refresh cycle coming up, which should allow them to maintain their market share."
Microsoft is confident that the Windows 7 operating system is still on track for a fiscal 2010 release, which could technically mean as early as July this year. "The best of all possible worlds would be that it's ready for back-to-school, which is the July-August time frame," said Caughey.