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Will Microsoft Deliver Worse Results Than A Year Ago?

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Will Microsoft Deliver Worse Results Than A Year Ago?
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Microsoft Corporation (NASDAQ: MSFT) will report its first quarter financial results on Thursday after market close.

Taking a look at Estimize, a small divergence between the crowd’s estimates and the Street’s projections can be seen. Wall Street analysts expect EPS of $0.51 on revenue of $21.032 billion, while the crowd models EPS of $0.56 on revenue of $21.577 billion.

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The graph below illustrates the company’s history of estimates versus actual earnings:

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The current estimates imply a considerable decline from the EPS of $0.68 registered in the first quarter of 2014, and an even larger fall from last quarter’s $0.71.

However, unlike other tech companies reporting earnings on Thursday, Microsoft did not see a big tumble in estimates over the quarter. Except for a peak in the crowd’s sentiment around mid-April, estimates for both the Street and the crowd have been pretty much flat. The graph below illustrates this:

Lukewarm Expectations

In a recent report, analysts at Morgan Stanley reiterated an Equal-Weight rating and $46 price target on shares of Microsoft:

“Given that the company appeared to be facing challenges to seamlessly executing its new plan in FQ2, investors are likely to focus on Microsoft's FQ3 performance to gain confidence in the company's ability to post sustainable EPS growth. The analysts, on the other hand, are keeping their eye on Microsoft's gross margins.

"'After a disappointing FQ2, the focus for Microsoft's FQ3 will be stability in key metrics, particularly around commercial billings growth, as well as Windows revenue,’ the analysts said.”

Latest Ratings for MSFT

DateFirmActionFromTo
Jan 2017Tigress FinancialUpgradesNeutralBuy
Jan 2017Wells FargoInitiates Coverage OnOutperform
Dec 2016PiperJaffrayInitiates Coverage OnOverweight

View More Analyst Ratings for MSFT
View the Latest Analyst Ratings

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