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The Zacks Consensus Estimate for revenues is pegged at $54.42 billion, indicating growth of 8.57% from the figure reported in the year-ago quarter.
The consensus mark for earnings has been unchanged at $2.65 per share over the past 30 days, suggesting 12.77% year-over-year growth.
Microsoft’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.27%.
Strength in Intelligent Cloud and Productivity and Business Processes driven by growth in Teams, Azure and other cloud services is expected to have aided top-line growth in the to-be-reported quarter.
Shares of MSFT have returned 36.7% and outperformed the broader Zacks Computer & Technology sector and its peers Dell Technologies (DELL - Free Report) and Hewlett Packard (HPE - Free Report) , which have gained 36.1%, 69.2% and 3.3%, respectively, in the year-to-date period. Shares of Zoom Video (ZM - Free Report) have declined 7.4% in the same period.
Let’s see how things have shaped up for the upcoming announcement:
Teams, Office 365 to Aid Productivity & Business Growth
The momentum witnessed for Teams, Microsoft’s workspace communication offering, might have acted as a tailwind in the to-be-reported quarter. Teams’ expanding customer base and features have been helping MSFT win shares in the enterprise communication market against Zoom. Teams’ user growth is expected to have been driven by the hybrid/flexible work model.
For the fiscal first quarter, Microsoft expects revenue growth in the Productivity and Business processes segment between 9% and 11% to a range of $18-$18.3 billion. Our model estimate is pegged at $18.26 billion, indicating growth of 10.9% year over year.
MSFT expanded the availability of Microsoft 365 Copilot to a wider range of customers, which is expected to have boosted revenue growth.
Strong adoption of Dynamics 365 is expected to have driven top-line growth in the to-be-reported quarter. Our model estimate for Dynamic 365 is pegged at revenue growth of 29.5% at cc.
Microsoft and OpenAI's shared commitment to building generative artificial intelligence (AI) systems and products that are trustworthy and safe.
In the to-be-reported quarter, Microsoft entered into a groundbreaking agreement with KPMG, aiming to make AI a central component of professional services. The company also extended its partnership with Teladoc to incorporate AI in documenting patient visits.
A Silver Lining for the PC Market Even as Decline Continues
Revenues from Windows are likely to have been driven by steady traction seen in Windows Commercial products and cloud services growth amid improving personal computer (PC) demand.
After eight consecutive quarters of year-over-year decline, the PC market is showing initial signs of stabilization, including sequential growth from the previous quarter. Per Gartner report, PC shipments in the July-September 2023 quarter declined 9% year over year to 64.3 million units. The third-quarter PC shipment data shows a strong improvement from the second quarter when PC vendors had shipped 59.7 million units.
Among big PC vendors, Dell Technologies and Lenovo registered a decrease in shipments. Dell Technologies’ PC volumes plunged 14.2% to 10.3 million units, while Lenovo registered a 4.4% year-over-year decline in shipments to 16.1 million units. HPE registered a 6.4% year-over-year improvement in shipments to 13.5 million units.
For More Personal Computing, the company projects revenues between $12.5 billion and $12.9 billion, pressured by the persistent decline in the personal computer market. It expects Windows OEM revenues to decline in the low-to-mid teens range.
Our model estimate is pegged at $12.69 billion, indicating a decline of 4.7% from the figure reported in the year-ago quarter.
In the to-be-reported quarter, Microsoft launched a cost-effective tier for the Xbox Game Pass, an upgrade to the Xbox Live Gold. The company also reached an agreement with Sony to ensure that Call of Duty remains available on the PlayStation platform after completing its merger with Activision Blizzard.
For Intelligent Cloud, Microsoft anticipates revenues in cc to increase between 14% and 15% to a range of $23.3-$23.6 billion. In Azure, MSFT expects revenue growth in the band of 25-26% at cc.
Our model estimate is pegged at $23.3 billion, indicating growth of 15% 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 2024 results on Oct 24.
The Zacks Consensus Estimate for revenues is pegged at $54.42 billion, indicating growth of 8.57% from the figure reported in the year-ago quarter.
The consensus mark for earnings has been unchanged at $2.65 per share over the past 30 days, suggesting 12.77% year-over-year growth.
Microsoft’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.27%.
Strength in Intelligent Cloud and Productivity and Business Processes driven by growth in Teams, Azure and other cloud services is expected to have aided top-line growth in the to-be-reported quarter.
Shares of MSFT have returned 36.7% and outperformed the broader Zacks Computer & Technology sector and its peers Dell Technologies (DELL - Free Report) and Hewlett Packard (HPE - Free Report) , which have gained 36.1%, 69.2% and 3.3%, respectively, in the year-to-date period. Shares of Zoom Video (ZM - Free Report) have declined 7.4% in the same period.
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, Office 365 to Aid Productivity & Business Growth
The momentum witnessed for Teams, Microsoft’s workspace communication offering, might have acted as a tailwind in the to-be-reported quarter. Teams’ expanding customer base and features have been helping MSFT win shares in the enterprise communication market against Zoom. Teams’ user growth is expected to have been driven by the hybrid/flexible work model.
For the fiscal first quarter, Microsoft expects revenue growth in the Productivity and Business processes segment between 9% and 11% to a range of $18-$18.3 billion. Our model estimate is pegged at $18.26 billion, indicating growth of 10.9% year over year.
This Zacks Rank #3 (Hold) company expects Office 365 revenue growth to be 16% in constant currency (cc), which is in line with our model estimate. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MSFT expanded the availability of Microsoft 365 Copilot to a wider range of customers, which is expected to have boosted revenue growth.
Strong adoption of Dynamics 365 is expected to have driven top-line growth in the to-be-reported quarter. Our model estimate for Dynamic 365 is pegged at revenue growth of 29.5% at cc.
Microsoft and OpenAI's shared commitment to building generative artificial intelligence (AI) systems and products that are trustworthy and safe.
In the to-be-reported quarter, Microsoft entered into a groundbreaking agreement with KPMG, aiming to make AI a central component of professional services. The company also extended its partnership with Teladoc to incorporate AI in documenting patient visits.
A Silver Lining for the PC Market Even as Decline Continues
Revenues from Windows are likely to have been driven by steady traction seen in Windows Commercial products and cloud services growth amid improving personal computer (PC) demand.
After eight consecutive quarters of year-over-year decline, the PC market is showing initial signs of stabilization, including sequential growth from the previous quarter. Per Gartner report, PC shipments in the July-September 2023 quarter declined 9% year over year to 64.3 million units. The third-quarter PC shipment data shows a strong improvement from the second quarter when PC vendors had shipped 59.7 million units.
Among big PC vendors, Dell Technologies and Lenovo registered a decrease in shipments. Dell Technologies’ PC volumes plunged 14.2% to 10.3 million units, while Lenovo registered a 4.4% year-over-year decline in shipments to 16.1 million units. HPE registered a 6.4% year-over-year improvement in shipments to 13.5 million units.
For More Personal Computing, the company projects revenues between $12.5 billion and $12.9 billion, pressured by the persistent decline in the personal computer market. It expects Windows OEM revenues to decline in the low-to-mid teens range.
Our model estimate is pegged at $12.69 billion, indicating a decline of 4.7% from the figure reported in the year-ago quarter.
In the to-be-reported quarter, Microsoft launched a cost-effective tier for the Xbox Game Pass, an upgrade to the Xbox Live Gold. The company also reached an agreement with Sony to ensure that Call of Duty remains available on the PlayStation platform after completing its merger with Activision Blizzard.
For Intelligent Cloud, Microsoft anticipates revenues in cc to increase between 14% and 15% to a range of $23.3-$23.6 billion. In Azure, MSFT expects revenue growth in the band of 25-26% at cc.
Our model estimate is pegged at $23.3 billion, indicating growth of 15% from the figure reported in the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.