Photo: Associated Press
Microsoft reports earnings after the close today. Tune in at 4 PM for our live coverage of the results.Intel and Apple produced great earnings for the quarter, but analysts only expect in-line earnings from Microsoft.
Microsoft has been reporting good adoption of Windows 7, and the company has done a good job controlling costs.
A big challenge from an earnings perspective is foreign exchange rate, which could lower revenue by $150 million from guidance given last quarter, according to Citi analyst Walter Pritchard.
The bigger challenge for Microsoft long-term (from stock perspective) is the explosive growth of Apple in the mobile area. The success of the iPad and iPhone have dented Microsoft’s stock as investors doubt Microsoft’s future growth.
Andy Zaky of Bullish Cross is calling for Microsoft’s revenue to be less for the quarter than Apple’s. A stat like that, coming after Microsoft lost its market cap lead to Apple, will only feed into the story line that Microsoft is stuck in neutral and Apple is a rocketship to the moon.
Other things we’ll be looking for: News on Microsoft Office sales, Bing’s progress, Windows Phone 7 release date, and Xbox Kinect expectations.
Bonus question: Will any analyst ask about executive unrest with Ballmer and the stock price?
Key consensus stats:
- Revenue: $15.3 billion
- Operating Income: $5.3 billion
- EPS: $0.46
Revenue estimates by division:
- Windows and Windows Live: $4.3 billion
- Server and Tools: $3.8 billion
- Online Services: $582 million
- Business Division: $4.97 billion
- Entertainment and Devices: $1.52 billion