The New York Times reports:
For the first time in Microsoft’s 23-year history as a public company, its sales dropped year-over-year.
Microsoft, the world’s largest software company, said Thursday that its revenue fell 6 percent, to $13.7 billion from $14.5 billion, in the quarter that ended March 31. And it reported net income of $3.0 billion, or 33 cents a share — a 32 percent drop in profits from the $4.4 billion, or 47 cents a share, reported in the same period last year.
The stock market is all about growth. $8 Billion in profits year in and year out won’t move your stock price. Naturally, the more money you make, the more challenging it becomes to produce significant growth year in and year out. In Microsoft’s case, it’s becoming more and more apparent that they’re falling victim to the old cliche, victimized by their own success.
When you have 90+% of the computer market, the only where you can really go is down. At best, you can maintain your position.
Still, as Apple shareholders rejoice in light of Apple’s recent earnings report, Microsoft’s earnings might help remind them who the big dog on campus still is. Apple investors were pumped about 1.2 Billion in profits in a good quarter. Microsoft reported $3.0 Billion in profits in a bad quarter.
At the same time, this exemplifies just how much room for growth there is for Apple. Microsoft may be the big dog today, but the times appear to be a-changin.