Microsoft has issued a warning that its revenue and earnings for the second quarter of its fiscal year, which ends Dec. 31, will be about 6 per cent below the software giant's original expectations.
The company blamed the shortfall on weak worldwide economic conditions that have slowed PC sales, corporate IT spending, and consumer online services and advertising.
Microsoft joins a list of companies that have issued financial warnings in recent weeks, including Hewlett-Packard, Apple Computer and 3Com.
According to the revised estimates, revenue for the second quarter is now expected to be in the range of $US6.4 billion to $6.5 billion, and diluted earnings is expected to be 46 cents or 47 cents per share, according to a statement by the company. Microsoft is scheduled to announce the earnings on Jan. 18.
"However, while our short-term results will continue to be affected by the current economic environment, our long-term outlook on the information technology market and the PC industry remains positive," Chief Financial Officer John Connors said in a statement.
"We have a lineup of new products and technologies that are receiving rave reviews from customers, and we continue to be very excited about the progress we are making across all our businesses."
Connors also lowered estimates for the rest of the fiscal year by 5 per cent, with revenues projected to be $25.2 billion to $25.4 billion, and earnings to fall in the range of $1.80 to $1.82 per share.