Microsoft Corp. (NASDAQ: MSFT) is scheduled to report its fiscal fourth-quarter financial results Tuesday after the markets close. The consensus estimates from Thomson Reuters call for $0.56 in earnings per share (EPS) on $22.06 billion in revenue. In the same period of last year, Microsoft posted EPS of $0.55 and revenue of $23.38 billion.

The personal computer (PC) business, under siege for so long because of the rise of smartphone use, took another hit, according to industry research firm IDC, as global PC sales during the second quarter fell 11.7% from the same period in 2014. If the erosion continues, the world’s largest manufacturers will need to reassess their businesses. The launch of new versions of Microsoft’s Windows generally lifts PC sales. However, the most recent version of Windows was not popular with consumers. The turn toward smartphones is relentless, and it has to sharply undermine the PC industry.

Just recently the company announced a round of layoffs totaling 7,800 and centered on its Phone Hardware segment. This follows one of the largest rounds of layoffs by any company since Microsoft announced layoffs last year of over 18% of its entire workforce.

The Windows operating system beat out the Apple Inc. (NASDAQ: AAPL) Mac by being the first to achieve mass adoption. People have personal computers because they are familiar with them, not because they are better. But Apple got to market first with the iPhone, so what advantage is there for a Windows phone?

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What will be interesting to see is how Microsoft earnings will stack up against Apple earnings, which are being reported after the close as well. The consensus estimates for Apple call for $1.81 in EPS on $49.31 billion in revenue, compared to the last year’s fiscal third quarter which had EPS of $1.28 and $37.43 billion in revenue.

Looking ahead, Microsoft announced in early June that it will be shipping out its newest operating system Windows 10 at the end of July. The software will be available for free download in 190 countries on that day.

Microsoft has put a lot of eggs into the Windows 10 basket. Hundreds of millions of computers out there use some version of the Windows operating system, and given the massive dislike users showed toward Windows 8, the new Windows 10 needs to be a smashing success.

Ahead of earnings, a few analysts weighed in on Microsoft:

• Wunderlich reiterated a Hold rating with a $52 price target.
• Deutsche Bank reiterated a Buy rating with a $55 price target.
• FBR reiterated an Outperform rating with a $52 price target.
• Nomura reiterated a Buy rating with a $55 price target.
• Pacific Crest reiterated an Overweight rating with a $55 price target.

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Shares of Microsoft closed Monday up 0.6%, at $46.92 in a 52-week trading range of $40.12 to $50.05. In early trading Tuesday, shares were down 0.9% at $46.49. The stock has a consensus analyst price target of $50.13.

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