Microsoft Set to Announce Flat Earnings?

Microsoft plans to release revenues and earnings for the first quarter of its fiscal year 2010 on Friday morning. Whether or not their report will please investors remains to be seen, although some early indications imply that financial analysts expect to see little progress from the summer quarter.

Analysts’ average estimates on Thursday predicted Microsoft (NASDAQ:MSFT) will report $0.32 earnings per share (EPS) for the quarter, according to Thomson Financial.

That would be significantly down from the same quarter last year when Microsoft reported earnings of $0.48 per share.

But it would be in line with the fourth quarter earnings that the company reported in July, when Microsoft earned $0.34 per share as well. Summer quarters are often slow for software sales due to vacations.

The latest predictions are posited on Microsoft bringing in an estimated $12.37 billion in revenue for the first fiscal quarter, which ended September 30, down from $13.1 billion in the fourth fiscal quarter of 2009, and much reduced from the $15.06 billion that Microsoft brought in during the same quarter last year.

However, analysts’ forecasts also see Microsoft bringing in $17.14 billion for the current quarter (which includes holiday sales) and EPS of $0.52. That’s quite a bump, driven by projections that holiday sales will be strong following the release of Windows 7.

Microsoft stopped giving analysts and investors forward guidance last January when it reported its second quarter figures. It announced the first layoffs in its history at the same time. The layoffs were completed by the end fiscal 2009 on June 30.

That was also the first time that the company reported revenues and earnings before the markets opened instead of after the close.

Now, for a second time, Microsoft (NASDAQ: MSFT) will release its summer quarter numbers before the financial markets open on Friday, rather than after they close on Thursday afternoon.

Microsoft did not provide any explanation for the change, although it likely would have clashed with Thursday’s launch of Windows 7 in New York.

The company formally launched Windows 7 with 14 simultaneous launch events world wide.

CEO Steve Ballmer has repeatedly said this year that he doesn’t expect the economy to bounce back to pre-recession levels but instead constitutes a “reset” of the entire economy.

Although Microsoft will likely show some revenue from pre-sales of Windows 7 in the first quarter, the holiday quarter ending December 31 is likely to be the first to show significant income due to sales of the new system.

In perhaps a metaphorical signal that times might be improving, Thursday morning, Chief Financial Officer Chris Liddell remotely rang the bell that opened the NASDAQ stock exchange.

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