Microsoft Expected To Crush Earnings Tonight

steve ballmer
Microsoft CEO Steve Ballmer

Microsoft reports earnings for the March quarter (Q3 of its 2011 fiscal year) this afternoon after close, and we’ll be covering them live here starting at 4 PM ET.Microsoft has come in ahead of estimates for the last two quarters, and this time analysts are expecting a strong quarter despite some reported weakness in PC sales.

PC market statistics have been mixed for the quarter. Research firm IDC saw global PC unit shipments dip 3.2% from last year — it had previously expected modest growth of 1.5% — and big PC sellers like Acer and HP have both shown weakness in PC sales to consumers in recent quarters.

But Intel’s quarterly earnings last week blew past expectations, showed 17% revenue growth from last year in its PC unit, and 32% in its data centre (server) unit. So that suggests that businesses are picking up their IT spending, which will help Microsoft in all three of its major businesses — Windows, business software (mostly Office), and servers.

Analysts will also be watching the Xbox business to see if Kinect continues to drive results there — last quarter, the segment containing Xbox (Entertainment & Devices) showed trailing-four profits of over $1 billion for the first time ever.

Here’s what Wall Street expects:

  • Revenue: $16.19B, up nearly 12% from last year. High estimate: $17.17B
  • EPS: $0.56, up 24% from last year. Whisper number: $0.58. High estimate: $0.61