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Market Overview

Earnings Outlook for Microsoft

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On Tuesday, January 26, Microsoft (NASDAQ:MSFT) will release its latest earnings report. Decipher the announcement with Benzinga's help.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street analysts see Microsoft reporting earnings of $1.64 per share on sales of $40.18 billion. Microsoft EPS in the same period a year ago totaled $1.51. Revenue was $36.91 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate, earnings would be up 8.61%. Sales would be up 8.87% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q1 2020 Q4 2020 Q3 2020 Q2 2020
EPS Estimate 1.54 1.37 1.26 1.32
EPS Actual 1.82 1.46 1.40 1.51
Revenue Estimate 35.72 B 36.50 B 33.66 B 35.67 B
Revenue Actual 37.15 B 38.03 B 35.02 B 36.91 B

Stock Performance

Shares of Microsoft were trading at $225.95 as of January 22. Over the last 52-week period, shares are up 37.63%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Microsoft is scheduled to hold the call at 17:30:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings Tech