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Microsoft Should See Firm 2nd Quarter On Windows XP Sales

Time: 00:00 EST/05:00 GMT | News Source: Wall Street Journal | Posted By: Todd Richardson

Microsoft Corp. should report another quarter of strong revenue growth thanks to a shift to high-priced versions of its Windows software, but its profits could suffer from its money-losing Xbox game business and litigation costs, analysts say. Demand for personal computers was lackluster in the usually strong December quarter, but corporate spending on technology appears to have been better than feared. Microsoft partner and semiconductor giant Intel Corp. said its profits doubled as revenue rose 3% in the December period.

Microsoft is scheduled to report fiscal second-quarter results after the close of trading Thursday. Its December results may outpace other technology firms because the Redmond, Wash., company enjoys a monopoly in the PC market and introduced several new products last year. It also has a $9 billion backlog of deferred revenue from deals signed in prior quarters to buoy its results.

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