Eternally upbeat Microsoft had some downbeat thoughts Thursday as it reported a $700 million shortfall in second-quarter sales.
Unprecedented economic dislocation, Steve Ballmer says
An 8 percent decline in its Windows business was the biggest culprit in the turndown. Purchases of traditional PCs fell 10 percent and strong netbook sales failed to compensate.
Netbook, portable computers that sell for $500 or less, take a lower priced version of Windows or use a Windows alternative operating system.
“We’re not used to down markets,” said CEO Steve Ballmer on a conference call. The company’s revenue was up 2 percent to $16.6 billion, but missed Wall Street expectations, as did its earnings per share of 47 cents before items.
Even consumer sales of Office felt the pain – down 23 percent in the quarter.
“The global economy continued to deteriorate beyond our expectations, particularly in the month of December,” said CFO Chris Liddell.
Ballmer said he does not expecting a quick turnaround in the economy or the company’s business.
“I’m not expecting a bounce,” he said on a conference call. “Our model is not for a quick rebound.”
Conditions could be soft for one or two years, he said. “I don’t know. This economic dislocation is unprecedented.”
