Microsoft is due to report its fiscal second-quarter results on Thursday.
The software giant is expected to post earnings of 69 cents per share, down from last year’s 74 cents per share. Revenue is likely to increase by just 1% to $19.2 billion in revenue, up from $19 billion in the same period last year. The expectations were set by Factset Research who polled Wall Street analysts recently.
The tech giant is likely to face a number of questions from Wall Street analysts on Thursday when it reports its financial results. Recent data from Gartner showed that PC shipments slowed in the recent quarter. In the U.S., PC shipments totaled 19.1 million units in the fourth quarter of 2010, a 6.6 percent decline compared to the fourth quarter of 2009. “Overall, holiday PC sales were weak in many key regions due to the intensifying competition in consumer spending. Media tablets, such as the iPad, as well as other consumer electronic (CE) devices, such as game consoles, all competed against PCs,” said Mikako Kitagawa, principal analyst at Gartner.
Microsoft’s revenue is heavily invested in both Windows and Office suites which are fueled by the PC market. Stiff competition from Apple’s iPad and a large number of new Tablets on the horizon has stalled consumer spending over the holiday period. Microsoft’s earnings highlight will be Kinect sales. The devices have soared to 8 million in just 60 days. Strong Kinect sales will help boost Microsoft’s entertainment and devices division too.
Bloomberg suggests that analysts will be quick to look over Microsoft’s entertainment and devices division for signs of life with Windows Phone. Thursday’s Q2, 2011 results will be the first time the company includes Windows Phone 7 devices into its revenue reports. Microsoft revealed in December that it had shipped 1.5 million Windows Phone 7 devices to carriers.
Microsoft’s previous quarter saw them report a record first-quarter revenue of $16.20 billion thanks to Windows 7, Office 2010 and Xbox sales.