Microsoft is not expected to meet fiscal Q2 2009 guidance
The game of lowering expectations continues for Microsoft this morning, as financial analysts fear that the company's fiscal second quarter numbers will fall shy of expectations, when it reveals its performance numbers tomorrow afternoon.
That's actually a pretty safe bet. Last October, the company targeted $17.3 billion in revenue as its low end of its guidance target. CFO Chris Liddell told analysts at that time that the company would be able to squeak through that number based on a lowering of its operating expenses.
But two factors are hampering any IT company's ability, let alone Microsoft's, to meet its end-of-year guidance. One is a much sharper than expected continued downturn in business orders and consumer sales, even after the front end of the storm was first felt last September. The other is the fact that gearing up for the economic storm costs money -- thus, so much for lowering Op-Ex. If Microsoft truly does cut jobs -- which would be a largely unprecedented move -- the near-term cost of those job cuts will be reflected in expenses.
Reuters is reporting that Wall Street analysts now expect a revenue target of around $17.1 billion.