Analysts Pessimistic on Microsoft Results, Cite Xbox 360

A Reuters report has relayed analyst comments on Microsoft's forthcoming quarterly earnings results, indicating that even outside the video game analyst community, there are concerns over how low shipments of Microsoft's Xbox 360 console may affect the company's results. Bill Kornitzer, portfolio manager at Buffalo Funds commented to Reuters regarding the possible results: "By and large, we're not going to be hoping for great things from Microsoft, because Xbox wasn't a blowout this year and it doesn't look like PCs were a blowout." In addition, UBS analyst Heather Bellini indicated that her predictions of Xbox 360 shipments in the quarter were reduced from 1.5 million units to 1.25 million units, particularly referencing both slow sell-through in Japan, and the worldwide shortages of the console. According to recent comments, Microsoft is now focusing on a target of 4.5 million to 5.5 million Xbox 360 consoles by the end of the fiscal year in June, after its initial 90 day target of 2.75 to 3 million consoles shipped appeared out of reach, mainly due to unspecified manufacturing slowness. Overall, however, Microsoft still estimates revenues of between $11.9 billion and $12 billion for the quarter, up more than 10% from the year before, meaning that the company is still in relatively rude health, and Microsoft's Home and Entertainment Division, in which its game business resides, is still an extremely small part of the company's overall growth picture.