Microsoft (Nasdaq: MSFT) shares are higher Thursday ahead of the
company's third-quarter earnings release, expected out before the
market opens Friday. The stock last traded at $26.70, up 1.2
percent from Wednesday's close.
A consensus of analysts on Wall Street expect Microsoft to report
EPS of $0.56 on revenue of $16.19 billion. Last quarter, the
Redmond, WA-based software and tech giant reported earnings of
$0.77 per share on sales of $19.6 billion, both beating the
consensus. Looking back at the third quarter of last year,
Microsoft issued EPS of $0.45 on revs of $14.50 billion, versus
consensus EPS of $0.42 and revs of $14.38 billion.
Shares fell 8.7 percent through the quarter and are up 4.8 percent
Microsoft shares currently trade at a P/E of 9.6x FY12 EPS
estimates, compared with 12.3x at Apple (Nasdaq: AAPL) and 14.7x at
Oracle (Nasdaq: ORCL)
Data from Bloomberg has 27 analysts with a Buy on Microsoft, 9 with
a Hold, and one suggesting to Sell. The analyst price target
average is $33.50, with a high of $37 and low of $30. Shares have
traded in a range of $31.43 - $22.73 over the last 52-weeks.
- J.P. Morgan is looking for EPS of $0.59 on revs of $16.239
billion. JPM notes the March quarter is typically the weakest for
Microsoft due to seasonality in PC shipments. JPM is "estimating
an organic, constant-currency revenue decline of 19.1% compared
with an historical average decline of 9.3%, which may help
provide some cushion if the weak PC market impacts the quarter."
JPM also said Microsoft may avoid the usual weakness in PC demand
for two reasons: "1) Any inventory build by OEMs would mask the
weakness temporarily, and 2) among the reasons Gartner cited for
weakness in PC demand was the consumer market in China, where
about 90% of MSFT software is pirated anyway."
- Collins Stewart is looking for EPS of $0.55. The firm points
out whisper numbers for Microsoft may be a little lower,
following bearish data from Gartner and IDC through the quarter.
The firm believes there will be solid growth from Microsoft,
following its disclosure of 350 million Windows 7 licenses sold.
Other Microsoft units should benefits from increasing IT demand,
and its Online Services division should start seeing some
kickback from Yahoo! (Nasdaq: YHOO).
- BGC is looking for EPS of $0.55 and revs of $15.98 billion.
BGC expects Microsoft to show growth in enterprise and emerging
markets, as the firm does not see tablets replacing primary-use
PCs anytime soon. BGC also says Microsoft Officer 2010 sales are
50 percent better then Office 2007, making it the best-selling
consumer version of Office in history.
"We also highlight that the recently signed agreement with Nokia
to have Windows Phone7 (WP7) power Nokia handsets is a major win
that should propel future versions of this operating system to #2
in market share, with a distinct possibility at being the #1 if
Android runs into legal constraints."
Stay tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results withi0 n seconds of the release.