Slowing PC Sales Hurt Q3'08

Slowing PC sales were a drag on Microsoft’s revenues in the quarter ending Mar. 31, 2008 (the third quarter of Microsoft’s 2008 fiscal year), although strong sales of Xboxes and games and a one-time tax benefit helped Microsoft show higher earnings than it had predicted. The company earned US$4.39 billion on US$14.45 billion in revenue during the quarter and did not significantly change its guidance for the remainder of the fiscal year. The company also released its preliminary expectations for FY’09, predicting approximately 12% revenue growth over this year.

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

Segment Performance

Microsoft’s two largest and most profitable segments, Client and Business, both came in short of the company’s revenue expectations in Q3’08, while a blockbuster quarter in the Entertainment and Devices segment helped boost overall revenue.

(For a chart detailing the results of each business segment, see “Revenue and Profit (Loss) by Business Segment“.)