Microsoft Corp.’s fiscal second-quarter earnings will be less than previously expected due to weak demand for personal-computers and the company’s new tablet, Surface, according to Brent Thill, an analyst at UBS AG.
Thill cut his estimate for Surface sales in half, to 1 million units for the period, which ended in December, citing “gloomy sentiment” after the holiday shopping season, he wrote in a research report today. He cut his earnings per share projection for the quarter by 8 cents to 76 cents.
Microsoft initially limited sales of the device to its own roughly 60 retail outlets and Surface also failed to draw many customers away from Apple Inc.’s iPad and rival devices with Google Inc.’s Android software. A new business-focused version of Microsoft’s tablet, Surface Pro, is expected to go on sale this month and may fare better against the iPad, Thill said.
“Surface Pro is the more promising” model, he wrote in the report.