Microsoft's Earnings Expectations

Introducation

Microsoft (MSFT) is a household name and one of the largest companies in terms of market capitalization in the world. The company is trading at a record high of $ 78.81 thanks to major successes such as Azure and the commercial model that has become the subscription services and recurring revenue we talked about in June. On Thursday, Microsoft will release its first quarter earnings report. Today, we will discuss what to look for in the results of results, future perspectives and we will provide an evaluation model that we can use to compare results after the announcement.

Overview

Microsoft develops, licenses, and supports software products, services, and peripherals around the world. The company is divided into three segments. Productivity and Business Processes offers Office 365 products and services for businesses and consumers, as well as LinkedIn's professional online network. Its Intelligent Cloud segment licenses server products and services in the cloud, such as Microsoft SQL Server, Windows Server and Azure, which now holds the second largest portion of the public cloud. The most personal computing segment of Windows includes OEM Windows, volume and other non-volume operating system Windows licenses, including Microsoft Surface and phones, as well as search advertising, including Bing and Bing Ads. This segment also provides gaming platforms, including the Xbox brand.

In its latest earnings report, Microsoft exceeded market expectations due to the extremely strong performance of Azure and the cloud. It achieved non-GAAP income of $ 24.7 billion and GAAP earnings per share of $ 0.83, exceeding expectations of $ 24.3 billion and $ 0.71, respectively.