Saturday 19 April 2014

Shrinking demand hurts Microsoft

Microsoft's profit missed analysts' projections as Windows sales were hurt by shrinking demand for personal computers and the company wrote down the value of unsold inventory of its Surface tablet. Shares also fell.

Excluding a 7c charge related to the inventory adjustment, fourth-quarter profit was 66c a share. Sales rose 10pc to $19.9bn (€15bn). Analysts predicted profit of 75c a share on $20.7bn in revenue, according to the average of estimates by Bloomberg.

Windows sales are being besieged by poor demand for PCs, reflected in five consecutive quarters of declining shipments, which researcher IDC predicts will be the worst annual drop on record.

It's a slide that the company's new Windows 8 software has failed to arrest. Chief executive Steve Ballmer is reorganising the company to try to spur better performance in areas like mobile computing as consumers gravitate to tablets and smartphones.

"Consumer PCs remain pressured," said Sid Parakh, an analyst at McAdams Wright Ragen in Seattle who rates the shares at hold.

Irish Independent

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