Had to shorten title 
Microsoft Corp. (MSFT) may post big gains in profit and sales for its fiscal second quarter when it reports results after the closing bell next Thursday, as the software giant is expected to benefit from a marketing program for the latest version of its flagship product, Windows 7.
Microsoft is expected to post earnings of 58 cents a share for the period ended in December, and $17.8 billion in revenue, according to analysts polled by Thomson Reuters.
That compares to earnings of 47 cents a share, and $16.6 billion in revenue for the same period a year earlier.
Microsoft's results should include $1.7 billion in revenue that the company had to defer in previous quarters through its Windows 7 upgrade option--a program that allowed buyers of certain personal computers with older versions of Windows to get a copy of Windows 7 after its October release.
While the recession has helped take a bite out of Microsoft's sales recently, even prompting the company to make its first-ever official round of layoffs early last year, analysts expect that Windows 7 will help it turn in a generally upbeat earnings report.
"Microsoft is poised to deliver strong December quarter results," JP Morgan analyst John DiFucci told clients in a recent research note.
DiFucci cited recent reports of improving personal computer sales--many of which come outfitted with Microsoft software--as well as "less piracy" of Windows 7 following its release.
Last week, research firm IDC estimated that 85.8 million PCs were shipped in the fourth quarter of calendar 2009, a 15% increase from the same period a year earlier.
While Microsoft has in the past lost out on the opportunity to capitalize on growing demand for pared-down, netbook computers, the company designed a version of Windows 7 specifically for the popular devices.
DiFucci has a $30 price target for Microsoft shares.
The shares have risen roughly 13% in the past three months, easily outpacing the Nasdaq Composite Index over the same period. Microsoft shares closed at $30.01 on Thursday.
Another aspect of Microsoft's business that investors are likely keen to hear more about is its online services unit.
Microsoft unveiled a revamped Internet search engine last year, and is currently seeking to close a partnership with Yahoo Inc. (YHOO) that could have it powering Yahoo's search results. Microsoft is also a major player in the market for online display advertising.
Sandeep Aggarwal, an analyst with Collins Stewart LLC, told clients in a recent research note that Microsoft's Internet business had a "largely positive" December, thanks to gains in its share of the search market, and various other initiatives.
According to data from comScore Inc., Microsoft gained 0.4% to reach a 10.7% share of the U.S. search market in December. Yahoo meanwhile slipped to a 17.3% share and Google maintained its lead with a 65.7% share, according to the data.
http://online.wsj.com/article/BT-CO-20100122-706596.html?mod=WSJ_earnings_MIDDLETopHeadlines
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Nice to look forward to the numbers next thursday!
