Microsoft will report fiscal second-quarter earnings after the market close on Tuesday.
Here’s what analysts polled by LSEG, formerly known as Refinitiv, are expecting:
- Earnings: $2.78 per share, adjusted
- Revenue: $61.12 billion
Analysts think Microsoft will deliver 16% revenue growth from a year earlier, up from 13% in the fiscal first quarter. Microsoft said in October that revenue would come in between $60.4 billion and $61.4 billion, meaning that analysts are more optimistic than company management was at the time.
Estimates earlier this month from Gartner and IDC suggest that the PC market has improved, a positive sign for Microsoft and its business of licensing Windows to device makers.
Cloud growth remains critical. Analysts polled by CNBC are expecting 27.7% growth from Azure and other cloud services, and the StreetAccount consensus is 27.5%. The metric for the previous quarter came in at 29%.
During the fiscal second quarter, Microsoft closed its acquisition of video game publisher Activision Blizzard, its largest deal ever. The company also announced custom cloud chips and started selling a $30 monthly Copilot artificial intelligence add-on to Microsoft 365 productivity software bundles.
But layoffs continued. Microsoft’s LinkedIn subsidiary cut around 700 jobs in October on top of the 10,000 announced earlier in the year. Last week, Microsoft said it’s eliminating around 1,900 employees in its gaming unit, or about 9% of headcount, following the Activision deal.
Jefferies analysts raised their target on Microsoft shares to $465 from $450 in a note on Jan. 28.
“We expect MSFT to execute well, driven by AI tailwinds and a stabilizing macro situation,” they wrote.
Microsoft shares have risen about 9% so far in 2024, while the S&P 500 index has gained 3% over that stretch.
Executives will issue guidance and discuss the results with analysts on a conference call starting at 5:30 p.m. ET.
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