Microsoft reports profit dip ahead of crucial Windows 8 launch

October 19, 2012
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Microsoft-Logo 600px Credit: James M Phelps, Jr / Shutterstock.com

It’s that time of the year again. Public tech companies report their earnings for the previous quarter, and analysts and tech bloggers get to dissect them and compare them against predictions.

But after years of growth, the mood is gloomy across the board this October. In the past few days, Intel, IBM, and AMD reported downbeat quarters, and just yesterday, Google’s botched filling caused a big dip in share value and a temporary trade suspension.

Another big name that reported its financial results for the third-quarter is Microsoft. Just like its Mountain View-based rival, Microsoft reported a slump in profit, which fell a greater-than-expected 22% year over year. However, Microsoft’s poor performance in July-September did not caught analysts completely unexpected.

Last week, it was revealed that, for the first time in more than a decade, PC sales would decrease in 2012, as estimated by IHS. Due to the poor economy, people around the world are clinging on their expendable income, or just preferring to buy cheaper tablets from Apple or the Android camp. In this context, analysts were not expecting any stellar news from Redmond, although it has to be said that the Street’s consensus was slightly better than the figures reported.

While the downbeat report for Q3 was somehow predictable, all eyes are now on Microsoft’s performance over the next three months. Steve Ballmer’s company has embarked in the greatest product makeover in its history, with major changes coming to many of its crucial divisions. For Microsoft, the next quarter might decide its fate in the coming years. The switch to the new Windows 8 and the newfound focus on mobile are amazingly risky, but the rewards match the gamble.

We’ll have a better idea about the future of Microsoft in January, when its next quarterly earnings report will be made public.

Comments

  • MasterMuffin

    How much does the w8 cost?

  • DogEars

    They did defer like $1.3B in revenue from W8 pre-orders.

    So their numbers were basically flat.