Microsoft’s quarterly financial report doesn’t look that good. Actually, the software giant recorded its first drop in earnings in 23 years and its level of optimism is very low. The company believes that the economic recession hasn’t showed her worst face yet.

 

Microsoft announced its quarterly revenue fell 6% to $13.7 billion, from $14.5 billion a year earlier, while net income dropped 32% at $3 billion, from $4.4 billion a year ago. Chris Liddell, Microsoft's chief financial officer, described the current economic pressure as “broad and deep.” 

 

"Recovery will be slow and gradual. We expect it to be difficult for the rest of this quarter and for the balance of the year," the Microsoft executive added during a press conference. As expected, the recession fears and worries determined corporate customers to refrain from buying new PCs and also from upgrading to new software. 

 

The only sector where Microsoft had good results was the sales of netbooks. These low cost laptops seem to survive the economic slump.

 

However, the company had a very efficient cost-cutting campaign. In the past quarter it managed to cut its administrative costs by $1 billion to $913 million. 

 

Microsoft’s stock went up 48 cents in after-hours trading. It rose 14 cents a share to $18.92 in regular trading before the earnings announcement.