Microsoft will report its quarterly earnings Thursday afternoon, and Wall Street analysts and investors will be listening closely for any new hints about the company’s plans for Windows 8, and for clues about the future of the PC market.

Some good news for Microsoft: Worldwide PC shipments increased slightly during the quarter, surprising technology analysts from Gartner and IDC, who had been expecting a decline. Microsoft’s Windows division relies heavily on sales of new PCs to drive its business.

Still, the overall increase of just 2 percent in PC shipments remains small — a sign of the impact of the iPad on demand for portable computers. Flooding in Thailand is also having a lingering impact on the supply of PC components.

Wall Street analysts polled by Thomson Financial expect the company to report overall revenue of $17.1 billion, an increase of 5 percent over the same quarter last year, with earnings per share of 57 cents, down from 61 cents in the same quarter a year ago.

The expected decline in profits reflects the rise of newer Microsoft divisions, such as the Xbox group (Entertainment & Devices), that don’t enjoy the large profit margins of Microsoft’s legacy Windows and Office products.

One question looking ahead is whether anticipation of Windows 8’s launch will impact the sale of PCs in the meantime, as companies and consumers hold off on purchases. Microsoft hasn’t said when Windows 8 will debut, but it’s widely expected later this year.

Another key area to watch: Windows Phone. Microsoft doesn’t traditionally disclose sales for its mobile operating system, but Nokia, the company’s key partner in the mobile industry, reports its quarterly earnings tomorrow, as well.

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  • Christopher Budd

    I’m wondering if there might not be a pre-Windows 8 bump in PC sales in the corporate sector. XP is coming to the end of it’s life and with some of the early reviews saying that the Metro/desktop combination can be confusing, I’m wondering if enterprises might not decide to go ahead and jump on Windows 7 now, leading to a bump.

  • MB

    The Windows “devision”, was that a Freudian slip:)?  As in “lack of vision”.  I think you meant division.   

    • Todd Bishop

      Thanks for the help, just fixed that.

  • Bill

    I’m personally holding back on new PC hardware until W8 comes out.
    workforce here was cut, so we have plenty of fairly recent PC’s around.

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