Microsoft bulls are hoping the software giant will calm worries about weakening corporate IT spending when it shares earnings and guidance on Tuesday afternoon.
Among analysts polled by FactSet, the consensus is for Microsoft to report September quarter (fiscal first quarter) revenue of $49.66 billion (up 10% annually) and EPS of $2.31.
Microsoft typically shares quarterly sales guidance for its three reporting segments – Productivity and Business Processes, Intelligent Cloud and More Personal Computing – during its earnings call. The company’s December quarter revenue consensus stands at $56.16 billion (up 9%).
Eric Jhonsa, Real Money’s tech columnist, will be live-blogging Microsoft’s earnings report, which is expected after the bell, along with its earnings call, which is scheduled for 5:30 P.M. Eastern Time.
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4:27 PM ET: Microsoft remains lower post-earnings: Shares are down 2.2% AH. As a reminder, quarterly guidance, which tends to have a big impact on how Microsoft trades the day after earnings, will be shared on the call.
4:24 PM ET: Compared with the guidance Microsoft issued on its July earnings call, the Productivity and Business Processes segment (it covers Office, Dynamics and LinkedIn) topped guidance, while Intelligent Cloud (covers Azure and server software) and More Personal Computing (covers Windows, gaming, hardware and ads) were in-line.
Intelligent Cloud came in near the low end of Microsoft’s guidance range, while More Personal Computing came in near the high end.
4:18 PM ET: Operating expenses rose 15% Y/Y in FQ1, which compares with 11% revenue growth and 14% FQ4 opex growth. Microsoft has signaled it’s looking to slow its spending growth, and recently carried out layoffs.
4:13 PM ET: $4.6B was spent on buybacks in FQ1, down from $7.8B in FQ4 and $6.2B in the year-ago quarter.
Capex totaled $6.6B, down from $8.7B in FQ4 and $7.3B in the year-ago quarter.
4:10 PM ET: Notably, Microsoft discloses in its earnings slide deck that commercial bookings fell 3% Y/Y in FQ1, after having grown 25% in FQ4. Forex was a major headwind (bookings rose 16% in CC, which compares with 35% CC growth in FQ4).
4:07 PM ET: Some key revenue growth rates:
Office commercial +7%
Office consumer +7%
LinkedIn +17%
Dynamics +15%
Windows OEM -15%
Windows commercial +8%
Xbox content/services -3%
Search/news ads +16%
Devices +2%
4:05 PM ET: Azure and other cloud services revenue rose 35% Y/Y (42% in CC), slightly below a 36.5% consensus.
4.03 PM ET: Shares are down 2% after hours to $245.62.
4:02 PM ET: Results are out. FQ1 revenue of $50.12B beats a $49.66B consensus. EPS of $2.35 beats a $2.31 consensus.
4:00 PM ET: Microsoft closed up 1.4% to $250.66. Earnings should be out shortly.
3:58 PM ET: Microsoft’s Azure revenue growth figure will once more get close attention. Azure revenue grew 40% Y/Y in FQ4 (46% in constant currency), and the FQ2 consensus is at 36.5%.
3:54 PM ET: Microsoft’s stock is going into earnings down 25% YTD, amid a 28% drop for the Nasdaq. But shares have risen 14% from a 52-week low of $219.13 (set two weeks ago).
3:51 PM ET: The FactSet consensus is for Microsoft to post FQ1 revenue of $49.66B and EPS of $2.31.. And the FQ2 revenue consensus (Microsoft shares sales guidance on its call) is at $56.16B.
The guidance might ultimately have a large impact on how Microsoft trades tomorrow — both because December is a seasonally big quarter, and because a lot of investors have been on edge about demand trends and forex headwinds.
3:47 PM ET: Hi, this is Eric Jhonsa. I’ll be live-blogging Microsoft’s earnings report and call.
