Technology

What to Look For in Microsoft Earnings

Chris Lange

Published: January 30, 2019 12:35 pm

Last Updated: January 31, 2020 1:16 am

Microsoft Corp. (NASDAQ: MSFT) is scheduled to release its fiscal second-quarter financial results after the markets close on Wednesday. Consensus estimates from Thomson Reuters call for $1.09 in earnings per share (EPS) and $32.5 billion in revenue. In the same period of last year, the tech giant said it had EPS of $0.96 on $28.92 billion in revenue.

Microsoft shares ended 2018 with an impressive gain and also broke out above their dot-com bubble highs from almost two decades ago as Satya Nadella’s move to the cloud and subscription services has been incredibly well received.

Many Wall Street analysts feel that Microsoft has become a clear number two in the public or hyper-scale cloud infrastructure market with Azure, which is the company’s cloud computing platform offering. Some have flagged Azure as a solid rival to Amazon’s AWS service, while others maintain that Microsoft is discounting Azure for large enterprises, such that Azure may be cheaper than AWS for larger users. The cloud was big in the third-quarter earnings report, which was outstanding.

Excluding Wednesday’s move, Microsoft had outperformed the broad markets, with its stock up about 9% in the past 52 weeks. However, in just 2019 alone, the stock was only up 1%.

A few analysts weighed in on Microsoft ahead of the close:

• KeyCorp has a Buy rating with a $125 price target.
• Merrill Lynch has a Buy rating and a $140 price target.
• Credit Suisse has a Buy rating with a $125 price target.
• Goldman Sachs has a Buy rating with a $123 price target.
• Morgan Stanley has a Buy rating and a $130 price target.
• Wedbush has an Outperform rating with a $140 target.

Shares of Microsoft were last seen up about 3% at $105.90 on Wednesday, in a 52-week trading range of $83.83 to $116.18. The consensus price target is $125.70.