Microsoft’s Fiscal First Quarter Earnings: What to Expect
Microsoft is set to report its fiscal first quarter earnings after the close of regular trading on Wednesday. Analysts are expecting a 14% annual growth in revenue, with estimates suggesting $27.9 billion in revenue for the Productivity and Business Processes unit.
New Reporting Structure
In August, Microsoft announced that it would be revising its reporting structure to reflect its management approach. As a result, mobility and security services, along with some Windows revenue, will now be part of the Productivity and Business Processes unit, which includes Office software.
Cloud Consumption in Focus
Investors will be keeping a close eye on cloud consumption, with analysts expecting $24.04 billion in revenue from the Intelligent Cloud segment, which includes Azure cloud infrastructure. This represents a 32.8% growth rate, according to CNBC’s consensus.
More Personal Computing Segment
For the More Personal Computing segment, analysts are expecting $12.56 billion in revenue. Microsoft will also publish a combined growth rate for sales of devices and sales of Windows operating system licenses to device makers.
Artificial Intelligence Investments
Microsoft’s AI investments will continue to be a major focus for investors, as the company builds out its infrastructure and ramps up chip spending to handle heftier workloads. The company has already announced plans to collaborate with BlackRock on an artificial intelligence infrastructure investment fund, with a goal of $30 billion in initial capital.
Spending on Property and Equipment
Analysts are also expecting Microsoft to report increased spending on property and equipment, with estimates suggesting $14.58 billion in spending for the fiscal first quarter, up 47% from the same period a year earlier.
Guidance and Conference Call
Executives will discuss the results and issue guidance on a conference call with analysts starting at 5:30 p.m. ET. Investors will be looking for insight into the company’s future plans and expectations.
Year-to-Date Performance
As of Tuesday’s close, Microsoft was up about 15% for the year, while the Nasdaq gained around 25% during the same period.
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