When Microsoft (MSFT) - Get Report reports its latest quarterly earnings later today, you will hear all kinds of short-term noise regarding the stock. Did the company make Wall Street earnings estimates? Is it announcing a large stock buyback?

When the announcement happens, shortly after the markets close here in New York, expect the stock price to zig and zag. But look beyond the moment at the actual numbers. In particular, look closely at revenue, not net income (which analysts expect to be 42 cents a share, according to

First Call/Thomson Financial

). Mister Softee can manage its bottom line with the best of them, which makes net income a somewhat elastic benchmark for investors. This is, after all, supposed to be one of the great growth companies.

Let's remember what has taken Microsoft down since late December: Investors have become increasingly concerned that the company's growth is slowing as the computer users move steadily away from a desktop-PC-based world to an Internet-based one. An investor should ask, Is that negative trend about to change for the software giant?

So far, there is no sign of a trend reversal.

Let's remember that it was only April 12 when

Goldman Sachs

analyst

Rick Sherlund lowered his March-quarter revenue estimates for the company. At that time, Microsoft was still on Goldman's recommended list. It was off the list 12 days later, after the company reported disappointing quarterly revenue and warned investors to lower their expectations for the next year.

In that April 24 report, Sherlund wrote, "Revenues of $5.66 billion were below Street consensus estimates of $5.95 billion and also below our recently revised estimate of $5.75 billion.... We have reduced revenue growth to 16% for fiscal 2001," which he termed "disappointing in a year of relatively good new-product cycles for MSFT."

Mister (Very) Softee
Microsoft vs. the Nasdaq Composite Index, six months

Sherlund in that report reduced the June-quarter revenue estimates to a range of $5.84 billion to $6 billion from $6.17 billion. Why? Slowing corporate demand for PCs was the main reason.

"It is our view that the corporate market is maturing at a much faster rate than the consumer market, with negative implications for Microsoft's revenue growth," he wrote. "There is an increasing risk that Microsoft might atrophy on the PC platform as

IBM

did on the mainframe platform, while robust growth shifts to hand-held and wireless devices."

His report crushed the stock, dropping the shares to the 65-to-68 level. That is below its current trading range, which suggests that weak news today could take the stock down again.

Since his damaging report, Microsoft's big new software product, Windows 2000, has gotten off to a slower-than-expected start. Why? That old bugaboo -- slowing corporate demand for PCs.

In June, the stock rallied from the low 60s to its current trading range. And

Bill Gates

has announced a new Internet strategy to analysts and the media. (

TheStreet.com's

Adam Lashinsky

examined the new direction in a

June 22 column.) But it is just a plan.

In his most recent report, dated July 12, Sherlund writes, "The stock has benefited from a relief rally following the conclusion of the antitrust case that has now moved on to the appeals process, and is likely a back-burner issue for a year or more. To get the stock materially higher from here, we would anticipate that investors will need to see evidence that business is actually beginning to accelerate."

So look for revenue growth, or the lack thereof, later today when Microsoft reports. The stock might go up on the news or it might go down, but top-line growth is the wheat amid all the chaff.