Shares in Microsoft Corp. closed down 3 percent on Friday after the world's biggest software maker pared back its outlook for the year despite a steady sales gain in the latest quarter. The decline marked a second consecutive lower weekly close, a drop that has taken Microsoft down by nearly 10 percent from its high last week of $54.93. "There is disappointment that the numbers were guided down," said Brendan Barnicle, analyst at Pacific Crest Securities. Microsoft shares closed at $49.56, down $1.55, or just over 3 percent on Friday, tracking a 2.8 percent decline in the Nasdaq Composite index. For its fiscal year to next June, Microsoft trimmed sales forecasts to between $31.4 billion and $32.0 billion, which would represent an increase of 11 to 13 percent from $28.4 billion in the year just ended.

Previously, Microsoft had projected slightly higher revenues for the current year but said it remained cautious because it expected the personal computer industry to remain sluggish with growth limited to single digits. Redmond, Washington-based Microsoft pegged per-share profit for fiscal 2003 at $1.85 to $1.91, a slight reduction from $1.89 to $1.92 projected three months ago.