Windows 7 Expected To Boost Microsoft Q2 Earnings
The macroeconomic climate looks better than it did at this time last year, when Microsoft glumly revealed that fiscal 2009 Q2 Client revenue had declined 8 percent due to PC market weakness and the shift to lower priced netbooks. Microsoft also announced the first widespread layoffs in company history, which have involved the cutting of more than 5,000 positions to date.
For Microsoft's fiscal second quarter, which ended Dec. 31., Wall Street analysts are expecting revenue of $17.84 billion and earnings of 59 cents per share, compared to $16.63 billion and 47 cents per share during the year-ago quarter.
Recent signs of life in the PC market, and solid earnings from Intel and AMD, suggest that Microsoft may finally see a rebound in Client revenue. And of course, Windows 7 will probably have a lot to do with this.
Microsoft VARs are nearly unanimous in their assessments of customer demand for Windows 7 since its launch last October. "The user reception and uptake that we've seen with Windows 7 has been significantly better than Vista," said Daniel Duffy, CEO of Valley Network Solutions, a Microsoft Gold partner in Fresno, Calif.
Duffy expects demand for Windows 7 to continue accelerating throughout 2010, and he's not alone. Steve Hall, CEO of District Computers, a Microsoft Gold partner in Washington, D.C., has seen almost twice as much revenue from new work this January compared to last, most of which is related to Windows 7 upgrade and migration services.
"Windows 7 is pretty hot in the SMB channel," Hall said. "It's been a significant bump."
Enterprises have also been moving steadily to Windows 7. Lee Nicholls, global solutions director for Microsoft technologies at Getronics, a global solution provider that works with many large enterprises, is seeing "incredible uptake" for Windows 7.
"There's a very positive message coming from the market that Windows 7 is everything Vista should have been, and more," Nicholls said.