Windows software sales slump hits Microsoft

Microsoft has posted disappointing first quarter results, with slumping sales of its Windows software and a below-target profit forecast, despite a boost in sales of its XBox entertainment console. The results published this week (April 24) come on the eve of its deadline for rival Yahoo! to accept a takeover offer.

The IT giant used the publication of results to put pressure on takeover target Yahoo!, saying its rival needed to forgo “unrealistic expectations” that it is worth more than Microsoft’s $44bn (£22m) offer. Yahoo! has until tomorrow (April 26) to accept the offer.

Chief financial officer Chris Liddell (pictured) says quarterly Windows revenue missed company expectations, due partly to an inventory build-up of computers and a lack of progress in the company’s ongoing battle against piracy.

Sales of Windows software dropped 24% during the quarter. Total revenues for the three months to end-March remained flat at $14.4bn (£22.5bn), while net income slumped from $4.9bn a year ago to $4.3bn in the first quarter. Microsoft’s poor performance comes despite a boost in Xbox sales during the quarter. Cumulative sales of the console passed the 19m mark during the quarter, an increase of 74% year-on-year.