Microsoft Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Microsoft (NASDAQ:MSFT) will unveil its latest earnings on Thursday, January 24, 2013. Microsoft develops, licenses, and supports a range of software products and services for a variety of computing devices.

Microsoft Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 76 cents per share, a decline of 2.6% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 86 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 76 cents during the last month. For the year, analysts are projecting profit of $2.87 per share, a rise of 3.6% from last year.

Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the first quarter, the company reported net income of 53 cents per share versus a mean estimate of profit of 57 cents per share. In the fourth quarter of the last fiscal year, the company beat estimates by 10 cents.

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A Look Back: In the first quarter, profit fell 22.2% to $4.47 billion (53 cents a share) from $5.74 billion (68 cents a share) the year earlier, missing analyst expectations. Revenue fell 7.9% to $16.01 billion from $17.37 billion.

Wall St. Revenue Expectations: On average, analysts predict $21.63 billion in revenue this quarter, a rise of 3.6% from the year-ago quarter. Analysts are forecasting total revenue of $79.86 billion for the year, a rise of 8.3% from last year’s revenue of $73.72 billion.

Stock Price Performance: Between October 22, 2012 and January 17, 2013, the stock price fell 75 cents (-2.7%), from $28 to $27.25. The stock price saw one of its best stretches over the last year between August 2, 2012 and August 9, 2012, when shares rose for six straight days, increasing 4.5% (+$1.31) over that span. It saw one of its worst periods between September 20, 2012 and October 1, 2012 when shares fell for eight straight days, dropping 6.2% (-$1.96) over that span.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 4.7% in the second quarter of the last fiscal year, 6% in the third quarter of the last fiscal year and 4%in the fourth quarter of the last fiscal year before dropping in the first quarter.

Analyst Ratings: With 18 analysts rating the stock a buy, none rating it a sell and 12 rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.68 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)