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April 23, 2009

Microsoft reveals first ever revenue decline

Expects weakness to continue

By Steve Evans

Microsoft has revealed a 6% drop in revenue, the first fall since the company went public in 1986. Revenue of $13.65bn reflects slowing IT spend as the economic crisis continues.

The Redmond giant reported financial results for the third quarter ended March 31, 2009, including a 32% year on year decline in net income to $2.98bn. The figures include $290m worth of severance charges relating to its plan to shed 5,000 jobs, which was announced in January this year.

Chris Liddell, Microsoft’s chief financial officer, said: “While market conditions remained weak during the quarter, I was pleased with the organisation’s ability to offset revenue pressures with the swift implementation of cost-savings initiatives. We expect the weakness to continue through at least the next quarter.”

The company also announced that it was on course to release Windows 7 – its latest Operating System – during fiscal 2010. Shares in the company rose 4% in after-hours trading as the news was revealed.

Microsoft blamed weakness in the global PC and server markets for a decrease in revenue in its Client, Microsoft Business Division, and Server & Tools divisions.

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