Wall Street analysts expect Microsoft's quarterly revenue to fall by 2 percent, and possibly more, when the company reports its financial results Thursday afternoon. If it happens, it would be Microsoft's first year-over-year decline in quarterly revenue as a public company, based on our review of financial statements dating to the mid-1980s.

Microsoft's business is being hurt by businesses and individuals reining in their spending on the software, computers and services that fuel the company's business. The last time there was such uncertainty about its revenue was in mid-2000, during the last economic downturn, when many of its customers were digesting the implications of a court order to break up the company.

Even then, Microsoft was able to eke out a small increase in revenue.

The company is still expected to pull in about $14.1 billion in revenue, compared with about $14.5 billion in the same quarter a year ago. But the possibility of a revenue decline, however small, illustrates the historic nature of the current downturn. Analysts expect Microsoft to report earnings per share of 39 cents, compared with 47 cents in the same quarter a year ago.

As a gauge of the company's performance, investors will be paying close attention to the Windows Client division, which makes the company's flagship PC operating system and relies heavily on personal-computer sales. Although the PC market is doing better than expected, one of the strong points appears to be netbooks -- which isn't necessarily a good thing for the company's financial health.

The problem is that Microsoft doesn't make as much money on the versions of Windows it sells for those small, Web-oriented notebook computers. In the December quarter, Microsoft's Windows Client revenue fell 8 percent, with the company saying the decline was primarily "a result of PC market weakness and a continued shift to lower priced netbook PCs." At the same time, Microsoft boosted sales and marketing expenses in the division by $80 million, or 19 percent, "primarily reflecting increased advertising and marketing campaigns."

[Related: Apple disses 'junky' netbooks, cites its own 'interesting ideas']

The big question is whether conditions overall have gotten bad enough since then to force further cutbacks. See yesterday's post: More Microsoft layoffs looming? Seattle analyst cites possibility.

Check back Thursday afternoon for detailed coverage of the company's fiscal third-quarter results. In the meantime, here's our snapshot showing how the rest of Microsoft's business units have done over the past few quarters, in revenue and operating profits (in millions). Click to open a larger version in a new window.

Note: For our review of past financial data, we used Microsoft's archived income statements, available in a spreadsheet here.