Bing, Windows 7 in spotlight for Microsoft results

20.07.2009
Windows 7 and Microsoft's new search engine, Bing, will be under close watch when the company reports its financial earnings this week.

Ahead of the results announcement Thursday, financial analysts have highlighted Windows 7 and Bing as reasons to be cautiously optimistic about business growth at Microsoft despite the continuing uncertain economic climate.

Microsoft's Windows business, which still provides the bulk of its revenue, has been taking a hit from netbooks, which have cut into traditional PC sales. However, Gartner's outlook for the PC market, released last week, was better than expected and therefore bodes well for Windows 7's release in October. Gartner had expected a 10 percent year-over-year decline in PC unit shipments for the second quarter, but ended up estimating a 5 percent decline instead.

"We expect [Windows] Client sales to be in line to slightly better considering better-than-expected PC unit shipments," Sid Parakh, a financial analyst with brokerage firm McAdams Wright Ragen, wrote in a research note.

Still, netbooks, where Windows faces greater competition from Linux, could continue to be a sore spot for Microsoft until Windows 7 is released in October, and even thereafter, analysts said.

Analysts from several firms -- including McAdams, JP Morgan and Collins Stewart -- expect Microsoft to meet or slightly exceed analysts' expectations for the quarter, which call for US$14.2 billion in revenue and $0.37 in earnings per share.