Menu
Bing, Windows 7 in spotlight for Microsoft results

Bing, Windows 7 in spotlight for Microsoft results

The products will be indicators for Microsoft's future, which looks bright despite the economy, according to analysts

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.

They expect some revenue to be deferred to the December quarter, or later, because of Microsoft's Windows 7 Technology Guarantee Program, which allows people to purchase PCs now with the right to upgrade to Windows 7 when it becomes available. Microsoft can't report that Windows 7 revenue until the upgrade occurs, which will be at least after the software's Oct. 22 availability date.

Still, even the deferred revenue is not expected to drag down Microsoft's results, analysts said.

Bing, meanwhile, could potentially give a boost to Microsoft's online services business, which has been flat or losing money for the past several years. Bing has received positive early reviews and taken some market share away from Yahoo in the less than two months since it was released, according to results from comScore and StatCounter.

Bing showed good initial traction with an 8.4 percent share of the U.S. search market, wrote Goldman Sachs analyst Sarah Friar in a research note. "With this, Microsoft has reversed the trend of market share loss that it has been experiencing in search, which we view as constructive and expect the company to build on," she wrote.

Analysts more broadly are looking at tech company results this quarter for signs that the industry is recovering from the beating wrought by the recession.

Most companies seem to be doing slightly better than they have been, if recent results and the outlook for the second half of the year from companies like Intel and IBM are any indication, but the economy does not appear to be out of the woods yet.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MicrosoftWindows 7bing

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments