Microsoft will report financial results on Friday, could this be the last bad news for a while?
Microsoft will report financial results on Friday, could this be the last bad news for a while?
Today Microsoft (NASDAQ: MSFT) released Windows 7 and Windows Server 2008 R2. Tomorrow it reports its Q1 2010 results and analysts are expecting the report to be ugly with big declines in both revenue and profit over the year ago quarter.
According to Yahoo Finance, analysts are expecting an average earnings per share of 32 cents compared to 48 cents for the year-ago quarter. Revenue is expected to slip by a whopping 17.9 percent over the same period, to $12.37 billion compared to $15.06 billion.
While Microsoft is still insanely profitable, and the slow economy has hurt Redmond just like it has hurt most other firms, there are some underlying trends that worry both analysts and investors.
For one, Gartner is reporting that PC shipments were actually surprisingly strong in the quarter — better than expected. They rose 0.5% over the same period last year, to 80.9 million units. This shocked even Gartner, who had previously forecasted a 5.6% decline, reports the Wall Street Journal.
Meanwhile, earlier this month Apple posted its most profitable quarter in history, largely due to Mac sales. Last month, Red Hat reported 12% revenue growth for its second quarter that ended August 31.
Microsoft’s hype machine over its next versions of products has served it well in the past — stalling out purchases of competitors’ products while customers wait to see what Microsoft will deliver. But in this case, it seems as if its hype machine really only hurts itself.
However, the hopes it pinned on Windows 7 may be more than justified. According to an e-mail sent to me by an Amazon PR spokesperson:
“Windows 7 has already surpassed pre-orders for Windows XP and Windows Vista combined, and now Windows 7-ready PCs are moving up the ranks on Amazon’s Bestsellers list for Computers & Accessories:
“As of noon PT today:
- The HP G60-530US 15.6-Inch Black/Silver Laptop – Up to 3.75 Hours of Battery Life (Windows 7 Home Premium) increased 2,491 percent in sales rank moving from No. 311 to the No. 12 Bestseller on Amazon.com’s list of Bestselling Computers & Accessories.
- The Acer Aspire Timeline AS4810TZ-4508 14-Inch Aluminum Laptop – Over 8 Hours of Battery Life (Windows 7 Home Premium) increased 906 percent in sales rank, now holding the No. 58 spot on Amazon.com’s list of Bestselling Computers & Accessories.
- The Lenovo S10-2 10.1-Inch Black Netbook – Up to 6 Hours of Battery Life (Windows 7 Starter) increased 590 percent in sales rank jumping from No. 780 to No. 113 on Amazon.com’s list of Bestselling Computers & Accessories.
- Lastly, 13 additional Windows 7-ready PCs have made a splash on Amazon.com’s Top 25 “Movers-and-Shakers” for Computers & Accessories – a list of the biggest gainers in sales rank (by units sold) over the last 24 hours!”
So we’ll see if Linus Torvalds will still be smiling when Microsoft reports it Q2 results or if will finally be Steve’s turn to grin.
