flappo
01-22-2009, 10:57 AM
http://www.bloomberg.com/apps/news?p...d=aS3gBx8o1pWM
Jan. 22 (Bloomberg) -- Microsoft Corp. will cut as many as 5,000 jobs, its first companywide firings, and said sales and profit will probably drop as the global recession eats into demand for software. The stock fell the most in three months.
The reductions, about 5 percent of its workforce, will take place in nearly all areas and will help save $1.5 billion, Microsoft said today in a statement. The company will also eliminate merit-based pay raises, cut travel costs and reduce the use of contractors to shore up profits.
Chief Executive Officer Steve Ballmer is under pressure to reduce costs as sales growth dries up in what may be the worst recession since World War II. The company’s Windows division, which accounts for about a quarter of sales, is suffering after personal-computer shipments rose at the slowest rate in six years in the fourth quarter.
“People aren’t buying PCs,” said Kimberly Caughey, senior equity analyst at Fort Pitt Capital Group Inc. in Pittsburgh, which owns 361,685 Microsoft shares. “They’re taking quick action to right-size their company. This is really only 22 days after the close of the quarter, and they must see deteriorating conditions.”
Microsoft, based in Redmond, Washington, fell $1.58, or 8.2 percent, to $17.80 on the Nasdaq Stock Market at 9:57 a.m. New York time and dropped as low as $17.76. The shares lost 45 percent of their value in 2008.
Microsoft also said second-quarter net income fell to $4.17 billion, or 47 cents a share, from $4.71 billion, or 50 cents, a year earlier. Sales were $16.6 billion in the period, which covered the last three months of 2008.
Cutting Costs
Analysts predicted profit of 50 cents a share and sales of $17.1 billion, according to a Bloomberg survey. In October, the company forecast profit of 51 cents to 53 cents a share on sales of $17.3 billion to $17.8 billion.
“Economic activity and IT spend slowed beyond our expectations in the quarter,” Chief Financial Officer Chris Liddell said in the statement. “We acted quickly to reduce our cost structure and mitigate its impact.”
Sales and earnings will almost certainly drop in the fiscal second half compared with a year earlier, Liddell said. The company said it will no longer offer revenue and earnings-per- share forecasts for the rest of its fiscal year ending June 30.
Microsoft said 1,400 jobs will be cut today and the rest of the reduction will be done over the next 18 months. The company will also cut travel spending by 20 percent and will eliminate merit-based increases to salaries for next fiscal year.
Windows Growth Stymied
“While this is the most challenging economic climate we have ever faced, I want to reiterate my confidence in the strength of our competitive position and the soundness of our approach,” Ballmer wrote in an e-mail disclosing the cuts to employees today.
The company needed to reduce costs to allay concern among investors that its expenses were too high given the state of the economy, said Heather Bellini, an analyst at UBS AG in New York. She expected the company to slice 5 percent to 7 percent from an operating expense budget of $27.4 billion by cutting full-time employees and contractors.
Microsoft has about 96,000 employees, an increase of more than 50 percent since June 2005. The company has made jobs cuts in the past, although they were smaller and were limited to a single unit or product.
Growth in the PC Windows unit was stymied by slowing demand for all but the cheapest machines. While consumers and businesses hold off buying computers with the latest premium version of Windows, demand is increasing for netbooks, machines that cost less than $500 and use the cheaper Windows XP or the rival Linux operating system.
Bellini had predicted that sales in the Windows unit fell 2 percent to $4.3 billion last quarter. That compares with Microsoft’s October forecast for growth of as much as 10 percent.
To reduce costs, Microsoft is also delaying parts of a planned campus expansion and letting some building leases expire, spokesman Lou Gellos said this week.
....
while at apple
Apple demolishes Street with best quarterly revenue and earnings in company history in fiscal Q109
Wednesday, January 21, 2009 - 04:35 PM EST
Apple today announced financial results for its fiscal 2009 first quarter ended December 27, 2008. The company posted record revenue of $10.17 billion and record net quarterly profit of $1.61 billion, or $1.78 per diluted share. These results compare to revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, equal to the year-ago quarter. International sales accounted for 46 percent of the quarter's revenue.
In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone and Apple TV over their economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures for the quarter are $11.8 billion of "Adjusted Sales" and $2.3 billion of "Adjusted Net Income."
Apple sold 2,524,000 Macintosh computers during the quarter, representing nine percent unit growth over the year-ago quarter. The Company sold a record 22,727,000 iPods during the quarter, representing three percent unit growth over the year-ago quarter. Quarterly iPhone units sold were 4,363,000, representing 88 percent unit growth over the year-ago quarter.
"Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history -- surpassing $10 billion in quarterly revenue for the first time ever," said Steve Jobs, Apple's CEO, in the press release.
"Our outstanding results generated over $3.6 billion in cash during the quarter," said Peter Oppenheimer, Apple's CFO, in the press release. "Looking ahead to the second fiscal quarter of 2009, we expect revenue in the range of about $7.6 billion to $8 billion and we expect diluted earnings per share in the range of about $.90 to $1.00."
Jan. 22 (Bloomberg) -- Microsoft Corp. will cut as many as 5,000 jobs, its first companywide firings, and said sales and profit will probably drop as the global recession eats into demand for software. The stock fell the most in three months.
The reductions, about 5 percent of its workforce, will take place in nearly all areas and will help save $1.5 billion, Microsoft said today in a statement. The company will also eliminate merit-based pay raises, cut travel costs and reduce the use of contractors to shore up profits.
Chief Executive Officer Steve Ballmer is under pressure to reduce costs as sales growth dries up in what may be the worst recession since World War II. The company’s Windows division, which accounts for about a quarter of sales, is suffering after personal-computer shipments rose at the slowest rate in six years in the fourth quarter.
“People aren’t buying PCs,” said Kimberly Caughey, senior equity analyst at Fort Pitt Capital Group Inc. in Pittsburgh, which owns 361,685 Microsoft shares. “They’re taking quick action to right-size their company. This is really only 22 days after the close of the quarter, and they must see deteriorating conditions.”
Microsoft, based in Redmond, Washington, fell $1.58, or 8.2 percent, to $17.80 on the Nasdaq Stock Market at 9:57 a.m. New York time and dropped as low as $17.76. The shares lost 45 percent of their value in 2008.
Microsoft also said second-quarter net income fell to $4.17 billion, or 47 cents a share, from $4.71 billion, or 50 cents, a year earlier. Sales were $16.6 billion in the period, which covered the last three months of 2008.
Cutting Costs
Analysts predicted profit of 50 cents a share and sales of $17.1 billion, according to a Bloomberg survey. In October, the company forecast profit of 51 cents to 53 cents a share on sales of $17.3 billion to $17.8 billion.
“Economic activity and IT spend slowed beyond our expectations in the quarter,” Chief Financial Officer Chris Liddell said in the statement. “We acted quickly to reduce our cost structure and mitigate its impact.”
Sales and earnings will almost certainly drop in the fiscal second half compared with a year earlier, Liddell said. The company said it will no longer offer revenue and earnings-per- share forecasts for the rest of its fiscal year ending June 30.
Microsoft said 1,400 jobs will be cut today and the rest of the reduction will be done over the next 18 months. The company will also cut travel spending by 20 percent and will eliminate merit-based increases to salaries for next fiscal year.
Windows Growth Stymied
“While this is the most challenging economic climate we have ever faced, I want to reiterate my confidence in the strength of our competitive position and the soundness of our approach,” Ballmer wrote in an e-mail disclosing the cuts to employees today.
The company needed to reduce costs to allay concern among investors that its expenses were too high given the state of the economy, said Heather Bellini, an analyst at UBS AG in New York. She expected the company to slice 5 percent to 7 percent from an operating expense budget of $27.4 billion by cutting full-time employees and contractors.
Microsoft has about 96,000 employees, an increase of more than 50 percent since June 2005. The company has made jobs cuts in the past, although they were smaller and were limited to a single unit or product.
Growth in the PC Windows unit was stymied by slowing demand for all but the cheapest machines. While consumers and businesses hold off buying computers with the latest premium version of Windows, demand is increasing for netbooks, machines that cost less than $500 and use the cheaper Windows XP or the rival Linux operating system.
Bellini had predicted that sales in the Windows unit fell 2 percent to $4.3 billion last quarter. That compares with Microsoft’s October forecast for growth of as much as 10 percent.
To reduce costs, Microsoft is also delaying parts of a planned campus expansion and letting some building leases expire, spokesman Lou Gellos said this week.
....
while at apple
Apple demolishes Street with best quarterly revenue and earnings in company history in fiscal Q109
Wednesday, January 21, 2009 - 04:35 PM EST
Apple today announced financial results for its fiscal 2009 first quarter ended December 27, 2008. The company posted record revenue of $10.17 billion and record net quarterly profit of $1.61 billion, or $1.78 per diluted share. These results compare to revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, equal to the year-ago quarter. International sales accounted for 46 percent of the quarter's revenue.
In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone and Apple TV over their economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures for the quarter are $11.8 billion of "Adjusted Sales" and $2.3 billion of "Adjusted Net Income."
Apple sold 2,524,000 Macintosh computers during the quarter, representing nine percent unit growth over the year-ago quarter. The Company sold a record 22,727,000 iPods during the quarter, representing three percent unit growth over the year-ago quarter. Quarterly iPhone units sold were 4,363,000, representing 88 percent unit growth over the year-ago quarter.
"Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history -- surpassing $10 billion in quarterly revenue for the first time ever," said Steve Jobs, Apple's CEO, in the press release.
"Our outstanding results generated over $3.6 billion in cash during the quarter," said Peter Oppenheimer, Apple's CFO, in the press release. "Looking ahead to the second fiscal quarter of 2009, we expect revenue in the range of about $7.6 billion to $8 billion and we expect diluted earnings per share in the range of about $.90 to $1.00."