Analysts expect Microsoft (NSDQ: MSFT) to report a decline in revenue and profit for its fiscal third quarter, but the news might not be too bad. The earnings report is due after markets close on Thursday. Microsoft is typically very open about offering guidance on its performance but has strangely kept its mouth shut this time, leaving market watchers to wildly speculate. Analyst predict that the company will report earnings of 39 cents a share on $14.1 billion in revenue for the period ended in March, according to data from Thomson Reuters, compared to earnings of 47 cents a share on $14.5 billion in revenue for third-quarter 2008.
It’s lack of guidance has caused some to speculate that it will actually have pleasant, better-than-expected surprises for Wall Street this quarter. Others are sure that no news means bad news and that the company has wildly under performed. The naysayers, like Tim Klassell of Thomas Weisel, expect Microsoft to come in at a painful decline of $13.81 billion and 36 cents/share, reports Barron’s.
Let’s point out that even the lowest projections shows Microsoft declaring a whole heck of a lot of revenue and a profit. But market watchers and investors need Microsoft to show upcoming products and services that bode well for its long term future. Announcements about Office 2010, software-plus-services options and Azure/.Net Services CTP might help it offset what most see as a dying PC market. PCs declined 7.1% during the period, according to IDC. This is coupled with the fact that ultra low cost netbooks seem to be cannibalizing the PC market and are poised to eat more of it in the coming year. While Microsoft has been, so far, king of that netbook market, netbooks don’t create much income for the operating system giant. Intel CEO Paul Otellini this week told Wall Street that the enterprises have simply not been spending.
Also see:
Microsoft: How to screw up a monopoly
Angry shareholders say Microsoft squanders billions on pointless R&D projects
Shareholder activist targets Microsoft
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