NEW YORK/BOSTON (Reuters) – Microsoft Corp is expected to post a quarterly profit that misses its own target and announce thousands of job cuts this week as the global economic slump hurts even the technology industry's biggest players.
When the leading software maker reports fiscal second quarter results on Thursday, investors are likely to press for comments on its outlook and on Yahoo Inc, whose search business has been the object of Microsoft's desires.
The report comes against a backdrop of a wounded global economy that has stifled demand for everything from personal computers to business software and video games, all markets in which Microsoft is a significant player.
"All eyes are on the forecast," said Jefferies & Co analyst Katherine Egbert. "Expectations for the guidance are pretty low."
Analysts on average put Microsoft's profit at 49 cents a share for the quarter ended December 31, which includes a U.S. holiday shopping season that has been called the worst in at least four decades. The Redmond, Washington-based company had forecast a per-share profit of 51 cents to 53 cents for the quarter.
Wall Street is looking for quarterly revenue of $17.1 billion, according to Reuters Estimates, also short of Microsoft's own target of $17.3 billion to $17.8 billion.
Egbert says she expects Microsoft to report sales of its Windows software for PCs and laptops to drop 3 percent from a year earlier, making it the toughest quarter in eight years. She blames the shortfall on weak consumer sales, noting that businesses have yet to cut back as much as retail shoppers.
Wall Street's expectations for Microsoft's performance for its fiscal year ending in June 2009 have declined since it last reported results three months ago.
Analyst forecasts for full-year net income have dropped 10 percent to $17.77 billion, while revenue projections are down 4.4 percent at $63.68 billion, according to Reuters Estimates.
