PracticePeople In PracticeMicrosoft struggling to hit sales targets

Microsoft struggling to hit sales targets

The slump in US PC sales may hit Microsoft, analysts have warned, but continuing strength in Europe, software upgrade sales and controversial licence changes could still help the company meet expectations.

While the US slump in IT spending has hit leading IT companies like Intel, Oracle and Hewlett Packard, Microsoft has so far avoided issuing a warning.

Analysts expect Microsoft to announce sales of $6.46bn on 19 July when it reveals figures for the three months to the end of June.

‘The key to Microsoft’s performance is Europe,’ said George Godfrey, an analyst with ABN Ambrose.

‘If European spending is weaker than expected for the quarter, Microsoft could miss its numbers.’

Maceo Sloan, chief executive of NCM Capital Management, added: ‘There has been a pretty significant deterioration in PC sales. It is possible they [Microsoft] will miss the numbers this quarter.’

But other analysts point to Microsoft’s strength in other areas and foresight in lowering expectations earlier this year, something other industry leaders failed to do.

They say sales of Microsoft’s SQL database software and Back Office and Exchange products are up, and that the release of its new product Office XP could contribute $200m in sales in June alone.

Changes in licensing, although not popular with users, will also contribute, analysts said.

Links

Office XP: ‘try before you buy’ say users

Great Plains sets its sights on Europe

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