Microsoft, Motorola Earnings Put Spotlight on Tech


Tech stocks will be in focus on Thursday with earnings reports from such heavyweights as Microsoft, Motorola and Sony.

Motorola and Sony will issue their reports before the U.S. market opens, but Microsoft's news is expected after the bell.

Motorola, which is in the midst of restructuring, is expected to report a decline in earnings. Analysts’ forecasts call for Motorola to post a profit of 4 cents a share on revenue of $8.8 billion, Thomson said. Investors will be looking for signs of improvement in the company’s handset division and to see whether consumers are buying its new products, including the Razr 2 cellphone.

Meanwhile, Sony'scomputer game business is likely going to show signs of weakness , but analysts expect the company to report higher net profit, helped by strong sales of computers, digital cameras and camcorders.

Microsoft, a Dow component, is expected to report double-digit percentage gains on both the top and bottom lines. Sales will be aided somewhat by the release of Microsoft’s popular new “Halo 3” video game for its Xbox video game system. "Halo" has been credited with driving better-than-anticipated overall video game sales in September.

Reporting on Thursday

On average, analysts polled by Thomson Financial estimate Microsoft will earn 39 cents a share on revenue of $12.55 billion.

Outside the tech sector, investors will be weighing reports from companies including Bristol-Myers, Aetna, Comcast, Dow Chemical, and Wendy's.  

There will be much anticipation about Dow Chemical's results. Earlier this month, the Midland, Mich., chemical company postponed an investor meeting with analysts scheduled for November. Some have taken this development as a sign that Dow may be planning to take some steps to change the company in some way.

Lehman Brothers analyst Sergey Vasnetov has noted that others in the sector have undergone some big changes recently. This includes PPG Industries acquisition of SigmaKalon Group and Rohm & Haas' decision to buy back $2 billion in stock.

"Dow is likely to undergo a significant transformation in the near-term, perhaps using the recent PPG and Rohm & Haas actions as a roadmap," Vasnetsov wrote in a client note.

Analysts polled by Thomson Financial expect 90 cents per share and sales of $12.65 billion.

Dow and others in the sector have been battling higher raw material and energy costs.