Microsoft on Thursday reported a 1.8 percent rise in quarterly profit but said it was lowering its outlook for the full year because of fears of a “continued economic slowdown.”
The world’s biggest software company reported net profit in the first quarter of its 2008-2009 fiscal year of US$4.37 billion, or US$0.48 per share, slightly above analysts’ expectations of US$0.47 per share.
Revenue during the quarter which ended on Sept. 30 was US$15.06 billion, a 9 percent increase over a year ago and better than the expected US$14.78 billion, the Redmond, Washington, company said in a statement.
DIVERSITY
“In a challenging economic environment, the first-quarter results exhibit the strength and diversity of our business model,” chief financial officer Chris Liddell said.
But Microsoft said the weak economy would have an impact on its earnings.
“Microsoft’s business outlook reflects a balance of risks and the likelihood of a continued economic slowdown,” the statement said.
“The trends seen late in the first quarter are now forecasted to continue, whereas previous expectations were for the economy to improve in the second half of the fiscal year,” it said.
Microsoft said it expected revenue for the full fiscal year ending June 30 next year of US$64.9 billion to U$66.4 billion, down from the previously forecast US$67.3 billion to US$68.1 billion.
It said earnings per share were expected to be in the range of US$2 to US$2.10 per share, down from US$2.12 to US$2.18 per share.
VOLATILITY
The software giant said it expected “significant volatility” in demand for personal computers, forecasting growth of 10 percent to 12 percent in the second quarter and 8 percent to 12 percent for the year.
“We feel extremely good about our relative competitive position,” Liddell said. “We believe our exceptionally strong cash flow, product pipeline and financial strength will allow us to weather economic conditions well.”
Speaking in a conference call after the results were released, Liddell said Microsoft expected relatively good sales over the upcoming Christmas holiday period.
He said Microsoft would reduce spending in the near term in “lower priority areas.”
“We’ll review our hiring plans and make adjustments to our head-count growth, lower marketing expenses,” he said.
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