Microsoft Falls on Analyst Downgrades

Lehman reportedly cut its forecast for Microsoft's 2001 earnings to US$1.88 per share from $1.91, and reduced its revenue forecast for the year by $630 million to $25.9 billion.

At Goldman Sachs, analysts also cut their 2001 earnings estimate for Microsoft by three cents from $1.91 to $1.88, reports said.

Research firm IDC on Thursday predicted a fourth-quarter slowdown in U.S. consumer PC sales.

The report follows warnings in recent weeks from a slew of computer makers, including Gateway, Inc. (Nasdaq: GTW) and Apple (Nasdaq: AAPL) (Nasdaq: AAPL), that quarterly results will be weaker than expected because of slower sales. Declining demand has led to price cuts, which further cut into revenue, the companies said.

On Friday, chipmaker Intel Corp. (Nasdaq: INTC) (Nasdaq: INTC) joined in, lowering its fourth-quarter projections because of "recent large cancellations by customers worldwide." The company said a "slowing worldwide economy" was hurting demand for personal computers, meaning less demand for its products.

Motorola (NYSE: MOT) , Inc. is also being hit by a slowdown in demand for technology, saying its quarterly results will be below previous expectations, in part because of slower semiconductor demand.

According to IDC, personal computer sales in the U.S. will see year-over-year unit growth of 15.8 percent this quarter, and growth of just 11 percent over the third quarter of 2000. Worldwide, PC sales will total about 40.15 million, up 16 percent from the year-earlier quarter and 19.8 percent ahead of the preceding quarter.