Microsoft Warns of Lower-than-Expected Results

Microsoft Corp. Thursday joined the parade of technology vendors warning of lower-than-expected financial results, disclosing that revenue and profits for the quarter that ends this month will likely be as much as 6 percent below plan.

Revenue in Microsoft's second fiscal quarter is now expected to come in between US$6.4 billion and $6.5 billion, with a profit of approximately 46 cents per share. The software vendor also reduced its outlook for the rest of the fiscal year, saying that revenue for the year as a whole is now expected to total about $25.2 billion -- 5 percent lower than previous expectations.

Microsoft's warning comes one day after Compaq Computer Corp. said its fourth-quarter revenue will be as much as 10 percent below projections. Compaq's announcement in turn was preceded by similar warnings from PC makers Gateway Inc. and Apple Computer Inc. and from microprocessor rivals Intel Corp. and Advanced Micro Devices Inc.

"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 John Connors, Microsoft's chief financial officer, in a statement released as part of Thursday's announcement.

However, Connors added that Microsoft's longer-term view of the IT marketplace and the PC industry "remains positive." The company plans to release its second-quarter results on Jan. 18 and said it also will provide further details about its business expectations for the rest of the current fiscal year at that time.

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