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Byline: Patrick Seitz
The biggest challenge facing Microsoft Corp. isn't its ongoing legal woes, but its declining earnings.
The Redmond, Wash., software titan is set to post its first-ever drop in earnings per share this month.
First Call estimates that Microsoft's earnings will fall 5% to 42 cents a share in the quarter ended June 30, compared with the same period last year. It earned 44 cents a share in last year's June quarter. Microsoft on July 19 will issue results for the quarter.
"Microsoft is a mature company at this point. The days of 30% earnings growth are probably behind it," said Brendan Barnicle, an analyst with Pacific Crest Securities.
Last week, Microsoft celebrated a partial victory in its appeal of the government's antitrust case. The U.S. Court of Appeals for the District of Columbia Circuit on Thursday reversed a lower court's order that would have split the company in two.
But the appellate court affirmed a ruling that Microsoft illegally maintained its monopoly in the personal computer operating system market by bullying PC makers, Internet service providers and others.