Microsoft annual sales drop for first time in history

Microsoft today reported the first year-over-year decline in sales in the company's history, blaming falling sales of PCs and servers.

The company made $58.44 billion in sales in fiscal year 2009 fiscal, which ended June 30, a 3.2 percent decline from fiscal 2008 sales of $60.42 billion.

Net profit fell 17 percent during the 12 months from $17.68 billion, or $1.90 per share, to $14.57 billion, or $1.63 per share.

Quarterly sales and profit also fell from the same quarter a year ago. Sales reached $13.1 billion in the fourth quarter, a 17 percent decline from the 2008 fourth-quarter sales of $15.84 billion.

Fourth-quarter profit fell by 29 percent to $3.05 billion, or 34 cents per share, which included a deferral of revenue related to a Windows 7 Upgrade program, which decreased earnings by two cents per share. The fourth-quarter results also included legal charges, a loss of value in investments and severance charges related to layoffs the company has made; those items decreased earnings per share by 2 more cent.

Operating profit, which does not include the one-time charges, fell by 9 percent to $20.36 billion in the quarter.

"Our business continued to be negatively impacted by weakness in the global PC and server markets," said Chris Liddell, chief financial officer at Microsoft, in a statement. "In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter."

Operating expenses decreased in the fourth quarter to $9.11 billion from $10.16 billion a year ago.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com