Gates Is Chatty About Xbox, but Mum on Earnings

Microsoft's(MSFT Quote) chief software architect and chairman Bill Gates who gave the keynote at the Tokyo Game Show Friday, has been shooting his mouth off there about the wonders of the company's new Xbox video game console. But the chatty Gates was noticeably mute when asked about the company's earnings outlook for the second half of its current fiscal year, ending June 30.

Gates declined to say Friday whether the tumbling U.S. economy would cause Microsoft to warn that it would miss revenue and earning projections, as it did last quarter for the first time in a decade. Microsoft trimmed projections in January, saying profits for the third quarter, ended March 31, would come in at 42 cents to 43 cents a share, off up to 2 cents per share from analysts' estimates. Microsoft is expected to earn 43 cents per share in the June quarter and 45 cents in the September quarter.

``Whatever goes on in the economy will affect our sales like any other company,'' Gates told Reuters news service in an interview.

Hardly. Microsoft is more vulnerable than other companies because so much of its revenue is tied to consumer PC demand, and corporate IT spending, both of which have gotten walloped in recent weeks. And with most major tech players, like Intel (INTC Quote), projecting weaker earnings growth, it's hard for many to imagine that Microsoft will escape the same fate.

And that, after all, is the news of more immediate interest to buyers. As one frustrated 'Softee investor posted on a message board: "I don't have any money left to buy the stupid Xbox!"