Vista revenue forecasts too aggressive: Microsoft CEO

SEATTLE (Reuters) - Microsoft Corp. (MSFT.O) Chief Executive Steve Ballmer said on Thursday analysts' forecasts for revenue from Windows Vista in fiscal 2008 were "overly aggressive," sending shares down 1 percent.

The world's biggest software maker cautioned analysts that Vista sales will remain closely aligned to new computer sales. Ballmer said Vista would create a "small surge" in PC sales in fiscal 2008, but would not spur a big increase over normal growth rates.

"It looks like people are a little bit over optimistic, at least more optimistic than we are," Ballmer said in a presentation to analysts.

In January, Microsoft made available to consumers the newest version of its Windows operating system, called Vista. Windows runs on more than 95 percent of the world's computers and represents the company's biggest profit driver.

Analysts on average expect Microsoft to generate sales of $56.4 billion in fiscal 2008, which starts on July 1, which would be an increase of 12 percent from this year's estimates, according to Reuters Estimates. Earnings per share are expected to rise 15 percent to $1.69 in fiscal 2008.

Ballmer also forecast Microsoft's fiscal 2008 operating expenses would be "somewhat less" than the previous year, likely a bit below $2.7 billion.

"We will have moderating growth in operating expenses next year, but I wouldn't expect a huge drop," Ballmer said.

Last year, Microsoft shares fell sharply after the company disclosed a plan to increase spending to beef up its online business.

Ballmer also said Microsoft did not plan any major strategy shifts in how it returns cash to shareholders through buybacks and other means.

He added the company was willing to spend money to acquire online customers as it battles for share against rival Google Inc. (GOOG.O).

Ballmer expected operating margins in Microsoft's Office and Windows businesses to be stable over the next few years.

Microsoft shares fell 1.1 percent in extended trading to $29.14 from a Nasdaq close of $29.46.