The PC Betrays Microsoft

Earlier this evening, Microsoft (NAS: MSFT) reported worse-than-expected results, as its Windows division revenue plummeted from last year's fiscal first quarter. The stock fell more than 1.5% after hours.

Overall revenue fell 8%, to $16.008 billion, while earnings declined 22%, to $0.53. Analysts were expecting $16.42 billion and $0.56, respectively, according to data supplied by Yahoo! Finance. Windows 8 can't come soon enough, apparently.

Revenue and operating income in the Windows division fell 33.4% and 49.7%, respectively, reflecting both a global slowdown in PC sales and a lack of new Windows 8 machines. Microsoft officially unveils Windows 8 next week.

"The launch of Windows 8 is the beginning of a new era at Microsoft," CEO Steve Ballmer said in a press release. "Investments we've made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners."

Count Intel (NAS: INTC) among the needy. Last month, the chipmaker cut guidance on expected weakness in PC demand. Meanwhile, rival Advanced Micro Devices (NYS: AMD) hit a new low this week -- and that's in spite of supplying chips to Mr. Softy's new Surface tablets, which already look like a hot seller in the making.

Windows 8 will be a catalyst regardless. Pre-order sales of the new OS and an upgraded edition of Office amounted to another $1.36 billion in revenue, which Microsoft will recognize in the current quarter.

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