Satya Nadella, chief executive officer of Microsoft Corp., listens during an interview on The David Rubenstein Show in New York on Sept. 27, 2017.
Christopher Goodney | Bloomberg | Getty Images
Microsoft will report its fiscal fourth-quarter earnings after market close on Wednesday.
Here are Wall Street’s expectations for Microsoft:
- Earnings: $1.34 per share, adjusted, as expected by analysts, according to Refinitiv.
- Revenue: $36.50 billion as expected by analysts, according to Refinitiv.
The company’s earnings will be pulled down slightly by a shift in Microsoft’s retail strategy. On June 26, Microsoft announced that it would close its physical stores, resulting in a charge of $450 million, or 5 cents per share, before taxes, which will be factored into fiscal fourth-quarter earnings. The period ended on June 30.
Also in the quarter Microsoft disclosed a plan to shut down its Mixer video game streaming service, and announced the acquisitions of CyberX, Metaswitch and Softomotive. Industry research group Gartner estimated that PC shipments, a factor in Microsoft’s Windows sales, returned to year-over-year growth in the quarter, following a decline in the first quarter in connection with the pandemic.
In late April Amy Hood, Microsoft’s chief financial officer, said the company foresaw challenges from the virus in the quarter, and she called for the slowest revenue growth since 2017.
“We expect the sale dynamics for March to continue, including a significant impact in LinkedIn from the weak job market and increased volatility in new, longer lead-time deal closures,” she said. On Tuesday, the company announced it would lay off 6% of LinkedIn’s employees, or about 960 people.
On Wednesday, Slack accused Microsoft of anticompetitive practices in a complaint filed in the E.U. In the complaint, Slack alleged that Microsoft abused its market dominance in productivity software to promote Teams, a workplace collaboration app that competes with Slack.
Some analysts said in the past few days that they had heard about strong demand for cloud services in the quarter.
“Resellers we spoke with reported better-than-expected F4Q results driven by Office 365 and Azure,” wrote Robert Majek, who has a buy rating on Microsoft stock, wrote in a note distributed to clients on Monday.
With respect to guidance, analysts polled by Refinitiv are looking for $35.91 billion in revenue for the fiscal first quarter.
Executives will discuss the fiscal fourth-quarter results on a conference call with analysts starting at 5:30 p.m. Eastern time.
Microsoft shares are up about 34% since the beginning of the year.
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