The Microsoft Investor is a daily report from SAI. Sign up here to receive it by email.
MSFT Down With Tech
Market gains are gone with Bernanke’s testimony and as CPI comes in at expectations. Shares of MSFT are off with tech. Microsoft will report earnings on Thursday, July 19. Catalysts for the stock include Windows 8, Windows Server 8, Office 15 and Windows Phone 8; expansion in the smartphone market with primary hardware partner Nokia as well as tablet market with Surface; strides in cloud computing; profitability in the online business, including integration of Skype; and continued evolution of Kinect and next generation Xbox. The stock currently trades at 7.4x Enterprise Value / TTM Free Cash Flow.Earnings Preview: What To Expect From Microsoft (Various)
Join us LIVE on Thursday for coverage of Microsoft earnings.
- Citi: Walter Pritchard believes that in 12 months, Win 8 will have the company in a meaningfully better position and the “PC” market will reflect it. He continues to believe Win 8 needs touch to impress and with most devices at launch lacking touch, Win 8 is less likely to be a catalyst in the near term. Investors will likely continue to hide in Microsoft through early September on broad macro concerns and also the dividend raise will likely keep investors in the stock. He prefers Oracle over the medium term. Rating: 1. Price-Target: $35.
- Bank of America Merrill Lynch: Kash Rangan updated his model to reflect upside to the tablet market. He now estimates 2 million Win 8 tablets in the holiday quarter (vs. none previously). He views Win 8 tablets as additive to the PC market. In his view, the stock is more about upcoming Win 8 and how perception of defensibility of the Win / Office franchise could change. Rating: Buy. Price-Target: $36.
- ThinkEquity: Yun Kim believes the quarter should be mostly in-line, but remains cautious. He is wary of potential pricing issues for the Win 8 release given lower pricing of non-PC devices and believes shares are fairly valued at 10x current, and 9x forward EPS. Rating: Hold.
8 Things To Know About Microsoft’s Office 2013 Launch (Inc.)
Microsoft’s next-generation version of Office is one of many moves it is making to fend off the inroads Google is making:
- Touch modernizes Office apps
- No more paper note taking
- PowerPoint on the tablet
- Drag and drop features
- Cloud storage is the default
- Office is now social
- Perceptive Pixel presentations
- Three new subscriptions
The customer preview is available at office.com/preview.
Microsoft Ropes In Skype, Yammer And Skydrive (GigaOM)
Much of the new functionality looks like catch-up, but Microsoft showed off the latest version of Office and they hit all the right marks; a touch interface, cloud storage, VoIP integration and social networking tie-ins. The new Office will be both “ink-” and “touch-” enabled. It will store user documents to Microsoft’s SkyDrive by default. A lot of what was detailed was integration of the new Office with existing (and some more recently acquired) Microsoft products, including Skype for VoIP communication and Yammer for social networking.
The Old Dog Learns Some New Tricks (ZDNet)
Office 2013 as a working preview version that people can install and use instantly is a genius move, and not one expected from Microsoft. At a time when Google Apps still has many shortcomings, this is a counter-strike by Microsoft that is audacious and smart. Instead of having to wait an age before buying and installing them, the cloud delivery model means users can safely try them out now. At a stroke, Microsoft has cut the delivery cycle for some highly alluring new features by 18 months or more. Welcome to the 21st century.
The Embarrassment That Is Nokia-Microsoft (Business Insider)
This partnership is just not working out:
- Nokia Cuts Pricing Of Lumia: Nokia is cutting the price of a Lumia 900 smartphone to $50, down from $100. This is yet another sign that Nokia’s partnership with Microsoft has not revived either of the two companies.
- Nokia May Have Only Sold 330,000 Windows-Powered Lumias: After crunching smartphone market data from comScore and Nielsen, Horace Dediu believes Nokia only had 330,000 Lumia smartphones in use over the last four months in the U.S.
- One Embarrassing Statistic: According to Nielsen, Windows Mobile, Microsoft’s old smartphone operating system, has more marketshare than the current Windows Phone 7 platform.
Time to cut their losses?
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.