Microsoft Earnings Put Spotlight On PC Sales - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Operating Systems
News
10/18/2012
01:18 PM
50%
50%

Microsoft Earnings Put Spotlight On PC Sales

Windows 8 can't come soon enough for Microsoft and its partners, as consumers hold off computer purchases.

Microsoft is slated to report quarterly earnings Thursday after markets close, and investors will be looking for signs of how the company's Windows business is faring amid competition from tablets and other devices that don't run Redmond's venerable OS.

Also expected to weigh on Microsoft's sales is the impending launch of Windows 8, which may have consumers holding off on new PC purchases until after it arrives on Oct. 26.

Analysts surveyed by Thomson Reuters expect Microsoft's fiscal first-quarter earnings to fall 5.5%, to $16.42 billion. That's compared to $17.37 billion last year. Earnings per share are expected to decline from 68 cents to 56 cents.

In Microsoft's most recently completed quarter, Windows sales were off 12.6%, to $4.15 billion, compared to $4.74 billion the previous year.

[ See 8 Must-Haves For Windows Phone 8. ]

Microsoft is hoping Windows 8 will eventually boost those numbers. The operating system comes in two main versions, one that runs on traditional PCs as well as tablets that are powered by x86 or x64 processors from Intel or AMD. The other, Windows RT, runs on chips designed around ARM Holdings' system-on-a-chip architecture. Windows 8 Pro and Enterprise will run all existing Windows applications. Windows RT only runs new apps, which must be downloaded from Microsoft's Windows Store.

Intel is also hoping that Windows 8 provides a lift. The chipmaker this week reported that sales from its PC processor business were off 8% year over year, to $8.6 billion.

"Our third-quarter results reflected a continuing tough economic environment," said Paul Otellini, Intel president and CEO, in statement. "The world of computing is in the midst of a period of breakthrough innovation and creativity. As we look to the fourth quarter, we're pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market."

Analysts at research firm Trefis said that the run up to Windows 8 is impacting demand. "In light of the uncertain macro environment and the upcoming Windows 8 launch, Intel's customers are maintaining a lean inventory which in turn led to lower demand for its microprocessors," the analysts said in a note.

The firm said that tablets from Apple and Android device makers are taking a bite out of the Wintel ecosystem. "In light of the uncertain macro environment and the upcoming Windows 8 launch, Intel's customers are maintaining a lean inventory which in turn led to lower demand for its microprocessors."

Microsoft shares were off 0.54%, to $29.43, in afternoon trading Thursday. Shares of Intel were down 0.23%, to $21.74.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll