Microsoft Corp. (Nasdaq: MSFT) shares are trading in negative
territory Thursday heading into the tech and software giant's
third-quarter 2012 report, expected out after the market closes.
Analysts currently see Microsoft posting earnings of 58 cents per
share on revenue of $17.18 billion. The estimates compare with EPS
of 61 cents and revs of $16.43 billion reported in the same period
Shares of Microsoft gained 25.1 percent in the quarter and are 3.3
percent lower since. Microsoft's stock has traded within a range of
$23.65 to $32.95 over the last year.
Investors might glance at Intel's (Nasdaq: INTC) quarterly numbers
for a hint at what Microsoft might produce. Though Intel was strong
on the top and bottom, margin compression had investors in limbo.
For more color on Intel's quarter,
Data from Bloomberg currently has 25 analysts at Buy, 13 with a
Hold, and one at Sell on Microsoft. The Street's price target range
is $27 to $39, with an average of $34.
Implied volatility is about 40 percent above the historical level
on an annually calculated basis.
- Goldman Sachs sees EPS of 56 cents and revs of $16.9 billion,
with Windows revenue forecast at $300 million. Goldman noted
recent IDC data pointed to potential upside for Microsoft's
With overall solid numbers expected into the end of the upgrade
cycle, Goldman issued a little color for the future. On Windows
8, Goldman said the first year following the release will be key.
In addition, the firm commented: "In our view, enterprise
migration off WinXP ahead of the expiration for support in 2014,
as well as migration off Vista, could be an important metric to
monitor in CY12 and CY13. Our analysis suggests potential upside
to PC unit forecasts over the next two years of about 15 mn as a
result of enterprise upgrades (off an installed base of about
690mn business PCs)."
- BGC Partners is modeling EPS of 61 cents and revs of $17.33
billion. Windows division revs should dip 2.5 percent to $4.3
billion, with gains expected in all other segments when compared
The firm likes the dominance of Microsoft's Kinect in melding
user interfaces with computing. BGC said, "We expect that losses
in the Online division remain below $500 million for the quarter,
continuing the trend shown in the last two quarters. We also see
more effective use of marketing spend, showing a result from the
reorganization of that department."
Finally, BGC believes Microsoft displays the ability for strong
cost control leading to better cash flow. With a 40 percent gain
in operating cash flow last quarter and guidance calling for just
5 - 6 percent of growth in operating expenses through 2012, it
will be a metric eyed by investors.
- Wells Fargo sees revs of $17.1 billion and EPS of 59 cents.
Windows Division revs should fall 7.2 percent to $4.12 billion
with Online Services seeing a 14.7 percent pop in revs to $743
million. The firm said, "Given recent industry analyst reports
that indicate that PC shipments came in at nearly +2%, vs. our
expectation for no growth, we believe that there could be some
upside to revenue results in the WWL and MBD business
Stay tuned to StreetInsider.com's
section to see our analysis of the highly-anticipated quarterly
results within seconds of their release. You can also check out
Microsoft's past performance at Streetinsider's
Microsoft's Income Statement