Microsoft hit by first ever sales drop

Microsoft sales fell

Microsoft has reported its first ever year-on-year drop in sales as the decline in the global PC market hit the world’s largest software supplier.

The company announced third quarter revenue of $13.65bn (£9.3bn), six per cent down on the same period last year. Net income of $2.98bn (£2.03bn) was down 32 per cent.

In its previous financial quarter, Microsoft announced 5,000 job cuts, which resulted in $290m (£198m) spent on employee severance charges in the subsequent three months.

The supplier said that sales in its Client, Microsoft Business Division, and Server & Tools divisions were most affected by the weakness in the global PC and server markets, although revenue from corporate customers remained stable.

“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, chief operating officer at Microsoft.

Chris Liddell, chief financial officer at Microsoft, added: “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.”

Analyst IDC said worldwide PC sales slumped by 7.1 per cent in the first three months of this year.