Microsoft last night reported that its quarterly profits were virtually unchanged from a year ago, in line with lowered forecasts, but the software giant warned that sluggish computer sales and corporate technology buying would hit earnings in its current quarter.
Microsoft, which makes the Windows operating system found on most personal computers, said net profits for its fiscal second quarter to the ended of December were $2.62 billion.
Analysts had cut their forecasts for the quarter after the company issued a rare profit warning last month amid a downturn in PC sales.
The software company said third quarter were likely to come in just below the consensus Wall Street forecast.
'Our biggest concern would be PC demand, and then secondly the level of increase in technology spending by corporations,' Chief Financial Officer John Connors said after the announcement.
Revenues were $6.59 billion, up 8% from the $6.11 billion a year earlier and ahead of expectations.
Sales of Windows 2000 and its predecessor Windows NT rose 39%, with the more lucrative server product that powers corporate machines rising 20%.
The MSN Internet access service added half a million subscribers in the quarter to hit 4 million, but Connors said the MSN family of sites would feel the effects of a recent downturn in advertising spending.
