Microsoft Earnings Poised for Growth: What to Watch
23 Octobre 2019 - 05:35PM
Dow Jones News
By Aaron Tilley
Microsoft Corp. is set to report first-quarter earnings after
the market closes Wednesday. Although it just ceded its title as
the world's most valuable public company to Apple Inc., the
software giant has been riding high for the last few years, driven
by its fast-growing commercial cloud business. Here's what to look
for:
EARNINGS FORECAST: Microsoft is expected to report earnings per
share of $1.24, up from $1.14 for the same period last year,
according to analysts surveyed by FactSet. The company is expected
to post net income of $9.61 billion, up from $8.82 billion for the
year-ago period.
REVENUE FORECAST: Microsoft is expected to report $32.15 billion
in sales, up 10.6% from last year.
WHAT TO WATCH:
CLOUD WARS: Amazon.com Inc. remains the leader in the commercial
cloud business, but Microsoft's Azure is closing the gap. The
company's commercial cloud business, which includes Azure, Office
365 tools and other cloud services, surpassed $38 billion in sales
in the last fiscal year. Investors will be looking at how much
momentum that business can maintain, while also looking for signs
if Microsoft is grabbing existing cloud business from Amazon.
IT SPEND: Investors have grown anxious that macroeconomic
concerns could slow corporate IT spending on cloud services and
other items in the coming year. Microsoft is poised to provide its
outlook for the current quarter. While its numbers may not reflect
any such market weakness, analysts are likely to be sensitive to
any comments executives make that suggest IT investment demand is
slowing beyond 2019.
WINDOWS OUTLOOK: Companies still are upgrading to Windows 10,
which should underpin Microsoft earnings growth. The last quarter's
numbers should benefit from an easing of a chip-supply bottleneck
that hampered computer shipments in previous quarters. Microsoft,
early next year, will stop supporting the older Windows 7, so
investors are curious what that means for Windows 10 over coming
months.
(END) Dow Jones Newswires
October 23, 2019 11:20 ET (15:20 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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