Tech giant Microsoft (NASDAQ:
) will report third quarter earnings after market close on
Thursday. The consensus analyst estimate is for an earnings per
share figure of $0.56 on revenues of $16.42 billion.
The majority of analysts have a Buy or similar rating on the
stock, and price targets as high as $40 per share. Shares of
Microsoft closed at $29.59 on Wednesday, up 0.3 percent.
Microsoft continues to be an interesting name for investors,
but perhaps not because of the upcoming report.
Last quarter saw an unusual development for Microsoft -- the
company reported a loss. The loss was primarily due to the
ill-fated acquisition of aQuantive, an online advertising company
that ultimately failed to work out for the Windows-maker.
This earnings report ought to be interesting as investors
would look for a return to solid profitability. Investors might
expect disappointing sales given the recent performance of some
of Microsoft's key business partners.
Notably, Dell (NASDAQ:
) and Hewlett-Packard (NYSE:
) have disappointed investors tremendously in recent weeks.
Hewlett-Packard has been struggling for quite some time, and with
CEO Meg Whitman attempting a turnaround, investors might not be
able to fully tie its stock results to Microsoft.
) has also been beaten down, tumbling on Wednesday after
reporting earnings on Tuesday.
So given the poor showing of some of the personal computer
hardware makers, will investors be pre-disposed to fade
Microsoft's earnings this afternoon? With the imminent release of
Windows 8 on October 26, probably not.
With Windows 8, Microsoft is cutting its tether to the desktop
PC. According to reviews by
The Wall Street Journal
, Windows 8 is designed to be a single operating system for all
platforms, whether desktop, tablet, or notebook. "Windows 8
introduces the lapdesktabbooktop," writes Seth Rosenblatt, senior
editor at CNET. "Whatever you want to call it, Windows 8 makes
desktop computing portable by unifying the operating system
Windows 8 is designed specifically to work with touch screens.
Critics say that it may be confusing for consumers who are used
to using a mouse to navigate around a computer screen. But, given
the rapid diffusion of smartphones, which use touch screens
exclusively, this argument doesn't seem to hold water.
In fact, news reports state that there are now one billion
smartphones in use around the world. If that is the case, touch
screens can't be that hard to figure out.
The woes of PC makers Dell, Hewlett-Packard and chip maker
Intel do not necessarily foretell the outlook for Microsoft. Even
if the third quarter numbers are disappointing, if investors are
willing to look ahead, Windows 8 could firmly establish
Microsoft's position as the leading operating system across all
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