Shares of Microsoft (Nasdaq: MSFT) are trading higher Thursday
heading into the software giant's fourth-quarter 2012 earnings
announcement, expected out after the market closes.
Microsoft will hold a conference call at 2:30pm PDT Thursday. To go
to Microsoft's IR website for the call,
Currently, the Street is looking for EPS consolidation of 10
percent to 62 cents, from 69 cents reported in the same period last
year. Revs should move about 4.4 percent higher to $18.14 billion.
consensus numbers call for EPS of 64 cents on revs of $18.36
MKM Partners release a note earlier highlighting a few technicals
on Microsoft stock. The firm noted how Microsoft tested and bounced
off of its 200-day moving average. In addition, MKM noted a
positive divergence for Microsoft in the daily MACD histogram,
reflecting improvement in the short-term momentum. Microsoft also
has room to short-term overbought territory, according to daily
stochastic data, setting shares up for positive near-term momentum.
Data from Bloomberg has 28 analysts with a Buy rating on Microsoft,
11 at Neutral, and one with a Sell.
The Street's price target consensus is $36, ranging from $30 to
$40. Over the last 52-weeks, Microsoft has traded within a range of
$23.79 to $32.95.
Volatility for Microsoft is up just over 6 percent from Wednesday's
close and about 1 percentage point over its trailing annual daily
- Goldman Sachs sees EPS of 63 cents and revenue of $18.2
billion for the venerable software maker. Into the tape, Goldman
sees potential downside of 1 cent in earnings and $250 million in
sales following IDC PC data. Given macro and Goldman's mixed
channel checks, the firm believes the Street's revenue consensus
might be a little aggressive.
Overall, excluding a benefit from the recent sale of Facebook
(Nasdaq: FB) shares and hardware checks in Asia showing some
excess channel inventory, Goldman thinks its more likely that
clean EPS will miss views.
For Windows and Windows Live Goldman is looking at a 9 percent
drop to $4.3 billion, a little richer than the consensus at $4.2
billion. The call was based on aforementioned channel checks as
well as a $500 million deferral related to the Windows 8 upgrade
On Server and Tools, Goldman is below the Street at $5.1 billion,
noting longer sales cycles.
For Microsoft Business Diision, the firm is at $6.5 billion,
besting views. Notably, Microsoft will take that $6.2 billion
write-down for its Online Services Division, which will not
affect clean EPS expectations.
For fiscal 2013, Goldman is looking for revs of $78.2 billion and
EPS of $3.02, both slightly below views.
- BGC Partners sees EPS of 64 cents and revs of $17.91 billion.
The firm comments, "We expect that weakness in the windows
division, compounded by the Windows 8 upgrade option program
revenue deferral, is offset by sustained strength in server and
tools, and business division. We look for strong cost controls to
drive earnings upside above consensus. While short interest has
risen to 94 million shares, we also mention that June quarter is
fiscal year end for the company, and the Microsoft sales team
typically delivers strong results to end the year."
The firm sees Windows and Windows Live revs down 10.1 percent to
$4.2 billion, with BGC baking in weaker PC sales and $500 million
from the deferred revenue guarantee.
Server and Tools revs of $5.0 billion, up 8.2 percent from last
MBD at $5.9 billion, up 3.5 percent.
Online Services Division of $716 million, up 8.2 percent year
over year. BGC is bearish in the near-term here, but notes the
overall importance of gaining solid traction with online search.
The firm doesn't see losses greater than $500 million from here
- Back to MKM Partners, the firm sees revs of $18.2 billion and
EPS of 63 cents. MKM sees limited downside following Intel's
(Nasdaq: INTC) numbers and PC weakness already baked in. MKM
"believes enterprise strength should offset consumer weakness,
and expense controls should generate $0.01-$0.02 in EPS
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