Revenue, Profit Shrink in Q3'09

For the first time in Microsoft’s history as a publicly traded company, quarterly revenue declined from the previous year. In the quarter ended Mar. 31, 2009 (the third quarter of Microsoft’s 2009 fiscal year), revenue was down 6% to US$13.65 billion, due in large part to a decline in sales of PCs and server hardware to businesses; net income fell 32% to US$2.98 billion. The company expressed pessimism about PC sales and the overall economy for the remainder of the 2009 calendar year, but said that aggressive expense control, long-term licensing agreements, and new products in FY’10 would help it weather the downturn.

As was the case last quarter, Microsoft declined to give detailed guidance for its next quarter or next fiscal year, but it did make some general predictions.

(For an overview of Microsoft’s recent financial performance, see the chart “Microsoft Financials for the Last Five Quarters“.)

Revenue Declines in Four of Five Segments

Microsoft saw annual revenue declines in four of its five business segments. The one exception, Server and Tools, grew only 7% from the previous year, ending its streak of 26 consecutive quarters of greater than 10% annual growth.