Weak Personal Computing Unit Could Hurt Microsoft's Q1 Earnings

MSFT

Microsoft’s (MSFT - Free Report) stock price has experienced marginal gains on Monday, just days ahead of its upcoming first quarter 2018 earnings report. The Pacific Northwest tech giant is one of the biggest tech companies in the world, which means investors will pay close attention when it reports on Thursday.

Due to its size and scope, many investors will want to start to look further into Microsoft in order to gain a better understanding of the company’s performance ahead of its Q1 report.

Until a few years ago, Microsoft looked like it was on the cusp of a substantial decline based on a worldwide slowdown in PC sales. Now, after Microsoft proved it could adapt amid the changing tech world through new ventures like Azure and Office 365, the company looks ready to continue its current run of success.

Now, only a few days before Microsoft is set to report, our current consensus estimates are calling for the company to post earnings of 73 cents per share and revenue of $23.53 billion. If these projections are met, they would represent year-over-year growth rates of -4.5% and +15.0%, respectively.

On top of this, the stock is up nearly 27% year-to-date and currently sports a Zacks Rank #3 (Hold). Microsoft has also topped earnings estimates in 11 out of the last 12 quarters.

Earnings and revenues are just two of the many things analysts and investors will pay close attention to when Microsoft reports its first quarter 2018 results on Thursday. Thankfully, we can also use our non-financial metrics estimates to greatly enhance our understanding of how Microsoft might perform in its key divisions.

These important stock drivers are from our exclusive non-financial metrics consensus estimate file. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here>>>

A business segment that many investors will be interested in is Microsoft’s highly important More Personal Computing division. This segment, which is still the company’s largest unit and includes the company’s hardware, search advertising, and Windows venture, has struggled based on a decrease in demand for PCs around the world.

We project that the company’s More Personal Computing segment will continue its current decline. This Microsoft business unit sunk 1.6% last quarter, and now our current consensus estimate calls for More Personal Computing to slip about 5.1% to $8.82 billion this quarter.

For more stock-moving estimates ahead of Microsoft’s Q1 report, check out our full guide: 3 Key Estimates for Microsoft's Q1 Earnings Report

And make sure to check back here for our full analysis of Microsoft’s actual results later this week!

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