Microsoft quarterly profit falls amid competition from Apple
Sales of Microsoft Corp.’s Windows operating system slumped last quarter as Apple Inc.’s iPad crimped demand for consumer laptops, Bloomberg reported.
Revenue in Microsoft’s Windows division fell 4.4 percent to $4.45 billion, the company said yesterday a statement. That missed the $4.6 billion average prediction by analysts surveyed by Bloomberg. Microsoft’s total net income was $5.23 billion, eclipsed by the $5.99 billion reported by Apple last quarter.
It was the first time in 20 years that Apple’s quarterly profit bested Microsoft’s, Bloomberg said.
Consumer PC shipments dropped 8 percent in the quarter, Microsoft Chief Financial Officer Peter Klein said. Netbooks — the cheap laptops that became popular during the recession — plunged 40 percent, partially because of defections to tablet computers, he said. The decline overshadowed a better-than-anticipated performance from Microsoft’s Office unit and increased PC demand from corporations.
“You have to live underneath a rock not to know that the iPad has taken share from the netbook,” said Pat Becker Jr., principal of Becker Capital Management Inc., which holds Microsoft shares as part of its $2.5 billion in assets. “It’s a problem on the consumer side, and that’s a market where Microsoft continues to give up territory to Apple.”
Net income rose to 61 cents a share, from $4.01 billion, or 45 cents per share, Microsoft said. Excluding a 5-cent per-share tax benefit, earnings matched the 56-cent average of estimates compiled by Bloomberg.
The results underscore the ascendance of Apple, which surpassed Microsoft as the world’s most valuable technology company last May. The last time Apple’s profit was larger than Microsoft’s was 1991, Bloomberg said.
Though PC shipments to corporate customers rose 9 percent, tablet competition accounted for some of the sluggishness in consumer sales, Klein said in an interview.
“It’s fair to say tablet is some of that,” he said.