Microsoft's PC business shipped or reduced by 7% due to flooding in Thailand

According to foreign media reports, after the US stock market closes today, Microsoft will announce the second quarter report, and it is expected that the increase will be modest. The announcement of the quarterly report may cause a slight decline in earnings per share.

Since Thailand is an important hard disk production site, due to the severe flooding, Microsoft is greatly limited in the production of hard disk components, which is likely to have a huge impact on its PC business revenue growth. At the Nomura Technology Conference held last week, Tammy Reller, CFO and Chief Marketing Officer of the Microsoft Windows Division and Windows Live Division, said that the company expects PC shipments to decline in the fourth quarter Analysts had predicted 1% more.

Nomura Securities analyst Rick. In an investigation report, Rick Sherlund said that PC shipments are expected to decrease by 7%. Thus, Sherland expects the Windows division to reduce its quarterly revenue by $317 million. Sherland predicted that Windows revenue for the quarter was $4.7 billion, which was a drop of 7 percentage points from the same period last year.

The reduction in PC shipments may also have another consequence: Office software sales will also be lower than originally expected. Therefore, Sherland lowered his estimate for the fourth quarter revenue of the Microsoft Business Unit (mainly the Office business) by 227 million U.S. dollars, to 6 billion U.S. dollars. Compared with the same period of last year, it fell by 2%.

After making these adjustments to the forecast, at present, Sherland expects Microsoft’s quarterly revenue growth to be 2%, with total revenue of US$20.4 billion. This allowed Sherland to downgrade his previously estimated earnings of 78 cents per share to 75 cents per share, down from 77 cents per share in the same period last year.

The growth of Microsoft’s two other multibillion-dollar departments should be able to play a balancing role in offsetting the impact of flooding on company revenues. The Microsoft server and tools department continues to grow rapidly. In fact, according to Sherlund’s prediction, the sector’s growth rate was 10%, with revenues of US$4.7 billion, which was in line with the Windows division.

Microsoft's entertainment and equipment division (mainly Xbox game business) also continued to grow rapidly. According to NPD data, the Xbox console is the sales champion of game consoles last year, accounting for 40% of the retail sales of the entity. In addition, the company's Kinect motion sensing handles also sold very well during the second holiday season. Sherland believes that this should give the department a 13% sales increase, with total sales of $4.2 billion.