Microsoft profit, sales may fall short

Microsoft Corp. may have to warn shareholders that profit and sales will fall short this quarter for the first time since 2000, according to Heather Bellini, an analyst at UBS AG.

Bellini, the top-ranked software analyst by Institutional Investor magazine, said every one of Microsoft's five divisions may miss the company's and analysts' sales forecasts. The world's biggest software maker won't be able to cut enough costs to meet profit goals, New York-based Bellini said in an interview.

Microsoft said in October that it was preparing for a recession ranging from "mild" to "deeper" and forecast profit of as low as 51 cents a share and sales of as low as $17.3 billion. With consumers and corporations freezing spending, Bellini now expects the company to earn 48 cents a share on sales of $16.7 billion.

"Enterprises have gone on a buyer's strike just like consumers have," said Bellini. "You see the unemployment numbers -- I don't think people are worrying about upgrading laptops and desktops."

Microsoft, based in Redmond, Washington, fell 38 cents, or 2 percent, to $18.73 as of 12:11 p.m. New York time on the Nasdaq Stock Market.