What to Expect When Microsoft Reports Results After Close of Trading

July 20, 2017 by Chris Lange

Microsoft Corp. (NASDAQ: MSFT) is scheduled to release its fiscal fourth-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters are calling for 71 cents in earnings per share (EPS) and $24.27 billion in revenue. The same period from last year had 69 cents in EPS and $22.64 billion in revenue.

Numerous Wall Street analysts believe 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 analysts consider Azure as a solid rival to Amazon’s AWS service. The gains that these companies have been making are not surprising, and considering the rate that each of these companies has been growing their cloud services, this will be a rivalry for the ages.

To underscore that business shift, earlier this month Microsoft said it plans to cut close to 4,000 sales and marketing jobs as it moves rapidly into the cloud business in its fight against Amazon.

Microsoft spent $2.062 billion on share buybacks in the fiscal third quarter of 2017, and that came to a total of $13.7 billion for the trailing 12-month period. Microsoft has now spent a total of $54.1 billion on buybacks in the past five years, and $110.1 billion in buybacks over the past 10 years.

Ahead of the earnings report, a few analysts weighed in on the stock:

  • J.P. Morgan has a Neutral rating with a $64 price target.
  • Goldman Sachs has a Buy rating with an $88 price target.
  • Stifel has a Buy rating with a $73 price target.
  • Merrill Lynch has a Buy rating with an $83 price target.
  • Credit Suisse has an Outperform rating with an $84 price target.
  • Jefferies has a Sell rating with a $45 price target.
  • BMO Capital Markets has a Buy rating with a $75 price target.
  • Morgan Stanley has an Overweight rating with an $80 price target.

So far in 2017, Microsoft has outperformed the broad markets with the stock up nearly 19% year to date. Over the past 52 weeks, the stock is up closer to 40%.

Shares of Microsoft were last trading at $73.88, with a consensus analyst price target of $75.20 and a 52-week range of $55.61 to $74.24.

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