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The Zacks Consensus Estimate for revenues is pegged at $49.58 billion, indicating growth of 9.41% from the figure reported in the year-ago quarter.
The consensus mark for earnings has declined 0.4% to $2.30 per share over the past 30 days, suggesting 1.32% growth from the figure reported in the year-ago quarter.
Microsoft’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, the average surprise being 4.53%.
Let’s see how things have shaped up for the upcoming announcement:
Continued strength in its cloud computing platform, Azure, is expected to have positively impacted Microsoft’s fiscal first-quarter numbers. Azure has been witnessing rapid adoption owing to the accelerated digital transformation by business enterprises globally. Microsoft’s industry-specific cloud offering is also driving adoption.
Intelligent Cloud revenues are anticipated between $20.3 billion and $20.6 billion in the fiscal first quarter. Azure's revenue growth is likely to have been aided by continued strength in consumption-based services.
The Zacks Consensus Estimate for Intelligent Cloud revenues is currently pegged at $20.4 billion, indicating 20.3% growth from the figure reported in the year-ago quarter.
The momentum witnessed for Teams, Microsoft’s workspace communication offering, might have acted as a tailwind. Teams’ user growth is expected to have been driven by the continuation of remote work and mainstream adoption of the hybrid/flexible work model.
The introductions of Teams Rooms, Mesh for Teams and Teams Essentials are noteworthy developments. More than 60% of the Fortune 500 have chosen Teams Rooms to connect employees across the hybrid workplace so far in 2022.
Teams’ expanding customer base and features have been actually helping Microsoft win share in the enterprise communication market against Zoom (ZM - Free Report) . Shares of Microsoft have plunged 58.5% year to date against Zoom’s decline of 29.7%.
Revenues from Enterprise customers grew 31% year over year and represented 52% of total revenues, up from 45% in fourth-quarter fiscal 2022. The number of Enterprise customers grew 24% year over year to more than 198,900.
Strong adoption of Dynamics 365 is expected to have driven top-line growth in the to-be-reported quarter. Microsoft expects revenue growth for Dynamics to be in the mid-to-high teens range, driven by strength in Dynamics 365, including continued momentum in PowerApps.
PC Shipment Decline Likely to Hurt Top Line
Revenues from Windows are likely to have been driven by steady traction seen in Windows Commercial products and cloud services growth amid weak PC demand.
The decline seen in personal computer (PC) shipments in the first half of 2022, after two consecutive years of strong year-over-year growth, aggravated in the calendar third quarter, according to the latest data compiled by market research firm, Gartner.
Among big PC vendors, Dell Technologies (DELL - Free Report) , Apple (AAPL - Free Report) and Lenovo registered a decrease in shipments.
Dell Technologies’ PC volumes plunged 21.1% to 12.02 million units, while Apple registered a 15.6% year-over-year decline in shipments to 5.8 million units.
Continued weakness in the PC market demand and advertising spend is expected to have adversely impacted Windows OEM, Surface, LinkedIn, and search and news advertising revenues.
This Zacks Rank #4 (Sell) company expects Surface revenues to decline in the lower single-digit range.
In Windows commercial products and cloud services, customer demand for Microsoft 365 and advanced security solutions is expected to drive growth in the high single digits. The consensus mark for revenues from Windows stands at $5.36 billion.
In More Personal Computing, Microsoft expects revenues to grow between 1% and 4% in constant currency (cc) or $13 billion to $13.4 billion. The company expects overall Windows OEM revenues to decline in the high single digits.
The Zacks Consensus Estimate for More Personal Computing revenues is currently pegged at $13.12 billion, indicating a 1.4% decline from the figure reported in the year-ago quarter.
Image: Bigstock
Microsoft (MSFT) to Report Q1 Earnings: What's in the Cards?
Microsoft (MSFT - Free Report) is set to report first-quarter fiscal 2023 results on Oct 25.
The Zacks Consensus Estimate for revenues is pegged at $49.58 billion, indicating growth of 9.41% from the figure reported in the year-ago quarter.
The consensus mark for earnings has declined 0.4% to $2.30 per share over the past 30 days, suggesting 1.32% growth from the figure reported in the year-ago quarter.
Microsoft’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, the average surprise being 4.53%.
Let’s see how things have shaped up for the upcoming announcement:
Microsoft Corporation Price and EPS Surprise
Microsoft Corporation price-eps-surprise | Microsoft Corporation Quote
Teams Momentum to Aid Growth
Continued strength in its cloud computing platform, Azure, is expected to have positively impacted Microsoft’s fiscal first-quarter numbers. Azure has been witnessing rapid adoption owing to the accelerated digital transformation by business enterprises globally. Microsoft’s industry-specific cloud offering is also driving adoption.
Intelligent Cloud revenues are anticipated between $20.3 billion and $20.6 billion in the fiscal first quarter. Azure's revenue growth is likely to have been aided by continued strength in consumption-based services.
The Zacks Consensus Estimate for Intelligent Cloud revenues is currently pegged at $20.4 billion, indicating 20.3% growth from the figure reported in the year-ago quarter.
The momentum witnessed for Teams, Microsoft’s workspace communication offering, might have acted as a tailwind. Teams’ user growth is expected to have been driven by the continuation of remote work and mainstream adoption of the hybrid/flexible work model.
The introductions of Teams Rooms, Mesh for Teams and Teams Essentials are noteworthy developments. More than 60% of the Fortune 500 have chosen Teams Rooms to connect employees across the hybrid workplace so far in 2022.
Teams’ expanding customer base and features have been actually helping Microsoft win share in the enterprise communication market against Zoom (ZM - Free Report) . Shares of Microsoft have plunged 58.5% year to date against Zoom’s decline of 29.7%.
Revenues from Enterprise customers grew 31% year over year and represented 52% of total revenues, up from 45% in fourth-quarter fiscal 2022. The number of Enterprise customers grew 24% year over year to more than 198,900.
Strong adoption of Dynamics 365 is expected to have driven top-line growth in the to-be-reported quarter. Microsoft expects revenue growth for Dynamics to be in the mid-to-high teens range, driven by strength in Dynamics 365, including continued momentum in PowerApps.
PC Shipment Decline Likely to Hurt Top Line
Revenues from Windows are likely to have been driven by steady traction seen in Windows Commercial products and cloud services growth amid weak PC demand.
The decline seen in personal computer (PC) shipments in the first half of 2022, after two consecutive years of strong year-over-year growth, aggravated in the calendar third quarter, according to the latest data compiled by market research firm, Gartner.
Among big PC vendors, Dell Technologies (DELL - Free Report) , Apple (AAPL - Free Report) and Lenovo registered a decrease in shipments.
Dell Technologies’ PC volumes plunged 21.1% to 12.02 million units, while Apple registered a 15.6% year-over-year decline in shipments to 5.8 million units.
Continued weakness in the PC market demand and advertising spend is expected to have adversely impacted Windows OEM, Surface, LinkedIn, and search and news advertising revenues.
This Zacks Rank #4 (Sell) company expects Surface revenues to decline in the lower single-digit range.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In Windows commercial products and cloud services, customer demand for Microsoft 365 and advanced security solutions is expected to drive growth in the high single digits. The consensus mark for revenues from Windows stands at $5.36 billion.
In More Personal Computing, Microsoft expects revenues to grow between 1% and 4% in constant currency (cc) or $13 billion to $13.4 billion. The company expects overall Windows OEM revenues to decline in the high single digits.
The Zacks Consensus Estimate for More Personal Computing revenues is currently pegged at $13.12 billion, indicating a 1.4% decline from the figure reported in the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.