Microsoft's Revenue Drops for First Time

Microsoft Corp. said today its quarterly revenue fell from the previous year for the first time in its 23-year history as a public company, while its profit dived 32 percent. The shortfall illustrated the toll the recession has taken on the world's largest software maker, even though it remains one of the richest and most profitable companies. Microsoft, which cut 5,000 jobs in January, said today it would do away with merit pay increases in the next fiscal year.
 

The company did not issue earnings guidance for the rest of the year, and its earnings statement offered no hope for a rebound in the current quarter amid a global slump in PC sales. Profit dropped 32% to $2.98 billion, or 33 cents per share, in its fiscal third quarter. Last year, Microsoft earned $4.39 billion, or 47 cents per share. Excluding more than $700 million in charges related to the layoffs and investments, the company was in line with analysts' projections of 39 cents a share. (More Microsoft stories.)