Earnings Preview: What To Expect From Microsoft On Thursday – Forbes

Satya Nadella, chief executive officer of Microsoft Corp., looks on during a panel session at the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 17, 2017. World leaders, influential executives, bankers and policy makers attend the 47th annual meeting of the World Economic Forum in Davos from Jan. 17 – 20. Photographer: Jason Alden/Bloomberg

Microsoft Corp ($MSFT) is scheduled to release earnings after Thursday’s close. Microsoft is flirting with all-time highs and is a very widely owned stock. To help you prepare, here is what the Street is expecting:

Earnings Preview:

Microsoft is expected to report earnings of $0.79/share on $25.10 billion in revenue. Meanwhile, the so-called Whisper number is $0.81. The Whisper number is the Street’s unofficial view on earnings.

Company Profile:

Microsoft Corporation, incorporated on September 22, 1993, is a technology company. The Company develops, licenses, and supports a range of software products, services and devices. The Company’s segments include Productivity and Business Processes, Intelligent Cloud and More Personal Computing. The Company’s products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games, and training and certification of computer system integrators and developers. It also designs, manufactures, and sells devices, including personal computers (PCs), tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories, that integrate with its cloud-based offerings. It offers an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and it provides solution support and consulting services. It also delivers online advertising to a global audience.

Productivity and Business Processes

The Company’s Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises Office Commercial, including volume licensing and subscriptions to Office 365 commercial for products and services, such as Office, Exchange, SharePoint, and Skype for Business and related Client Access Licenses (CALs); Office Consumer, including Office sold through retail or through an Office 365 consumer subscription, and Office Consumer Services, including Skype, Outlook.com and OneDrive, and Dynamics business solutions, including Dynamics ERP products, Dynamics CRM on-premises, and Dynamics CRM Online. Its Office Commercial is designed to manage personal, team, and organizational productivity through a range of products and services. Office 365 is its cloud-based service that provides access to Office plus other productivity services. Skype is designed to connect friends, family, clients, and colleagues through a variety of devices.

The Company competes with Adobe Systems, Apple, Cisco Systems, Facebook, Google, IBM, Oracle, SAP, Infor, The Sage Group, NetSuite and Salesforce.com.

Intelligent Cloud

The Company’s Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. This segment primarily comprises Server products and cloud services, including SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure, and Enterprise Services, including Premier Support Services and Microsoft Consulting Services. Its server products are designed to make information technology (IT) professionals, developers, and their systems productive and efficient. Server software is integrated server infrastructure and middleware designed to support software applications built on the Windows Server operating system. This includes the server platform, database, business intelligence, storage, management and operations, virtualization, service-oriented architecture platform, security, and identity software. It also licenses standalone and software development lifecycle tools for software architects, developers, testers and project managers. CALs provide access rights to certain server products, including SQL Server and Windows Server, and revenue is reported along with the associated server product. Azure is a scalable cloud platform with computing, networking, storage, database, and management, along with advanced services, such as analytics, and solutions, such as Enterprise Mobility Suite. Azure includes a platform that helps developers build, deploy, and manage enterprise, mobile, Web, and Internet of Things applications, for any platform or device. Azure enables customers to devote more resources to development and use of applications that benefit their organizations, rather than managing on-premises hardware and software.

The Company competes with Hewlett-Packard, IBM, Oracle, Red Hat, CA Technologies, Apache, Linux, MySQL, PHP, SAP, BMC, VMware, Adobe, Ruby on Rails, Amazon, Google and Salesforce.com.

More Personal Computing

The Company’s More Personal Computing segment consists of products and services geared towards harmonizing the interests of end users, developers, and IT professionals across screens of all sizes. This segment primarily comprises Windows, including Windows OEM licensing (Windows OEM) and other non-volume licensing of the Windows operating system, volume licensing of the Windows operating system, patent licensing, Windows Embedded, MSN display advertising and Windows Phone licensing; Devices, including Microsoft Surface (Surface), phones, and PC accessories; Gaming, including Xbox hardware; Xbox Live, comprising transactions, subscriptions, and advertising; video games; and third-party video game royalties, and Search advertising. The Company designs, manufactures, and sells devices, such as Surface, phones, and other intelligent devices, as well as PC accessories. Its devices are designed to enable people and organizations to connect to the people and content using integrated Microsoft services and Windows. Surface is designed to help organizations, students, and consumers to be more productive. Its gaming platform is designed to provide a variety of entertainment through the use of its devices, peripherals, applications, online services, and content. It offers Xbox 360 and Xbox One.

The Company’s Xbox Live enables people to connect and share online gaming experiences and is accessible on Xbox consoles, Windows-enabled devices, and other devices. Xbox Live services consist of subscriptions and sales of Xbox Live enabled content, as well as advertising, and are designed to benefit users by providing access to a network of certified applications and services and to benefit its developer and partner ecosystems by providing access to a large customer base. It also designs and sells gaming content to showcase its platform capabilities for Xbox consoles, Windows-enabled devices, and other devices. Search advertising, including Bing and Bing Ads, is designed to deliver online advertising to a global audience.

Competitors:

The Company competes with Amazon, Apple, Google, Sony, Nintendo, Electronic Arts, Activision Blizzard and Facebook.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news.

 

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