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Microsoft (Nasdaq: MSFT) Corp. (Nasdaq: MSFT) was down 4 7/16 at 51 1/16 early Friday, as the software giant became the latest technology company to warn of a soft December quarter.
"We believe, like many other technology companies, that the current weakness in worldwide economic conditions is resulting in a slowdown in PC sales, corporate IT spending, and consumer online services and advertising," said chief financial officer John Connors.
Microsoft joins computer makers like Compaq Corp., chip companies like Intel (Nasdaq: INTC), and a host of other technology businesses in saying a slump in demand will crimp profits this quarter and beyond.
Yet news that the industry downturn was affecting a company as big as Microsoft -- which apparently had not issued a profit warning in 10 years -- was reported to weigh on U.S. stocks ahead of the market opening. The company issued its report after the close of trading Thursday.
Revenue at the Redmond, Washington-based company will likely total $6.4 billion to $6.5 billion for the second quarter ending December 31st, with earnings per share of 46 to 47 cents, Microsoft said. The results are 5 to 6 percent below previous expectations.
Microsoft also cut its revenue and earnings expectations for the rest of the fiscal year by about 5 percent, saying it now expects to earn $1.80 to $1.82 per share on revenue of $25.2 billion to $25.4 billion.
The company plans to report first-quarter results and further detail the outlook for the rest of the year on January 18th.
"While our short-term results will continue to be affected by the current
economic environment, our long-term outlook on the information technology
market and the PC industry remains positive," Connors said. "We have a
lineup of new products and technologies that are receiving rave reviews from
customers, and we continue to be very excited about the progress we are
making across all our businesses."
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