logo
  Join        Login             Stock Quote

Improving PC Sales Could Boost Microsoft Results

 April 18, 2012 10:21 AM
 


(By Mani) Software major Microsoft Corp. (NASDAQ: MSFT) is expected to report its third-quarter results on April 19.

Wall Street expects the company to earn 58 cents a share for the third quarter, a decrease of 5 percent from last year when it earned 61 cents a share. The consensus estimates, which ranges from 53 cents to 61 cents, has dropped from 61 cents a share expected 90 days ago.

Out of the past four quarters, Microsoft's earnings have managed to beat estimates on three occasions, while matching with Street view once. The margin of difference in earnings beat was 2.6 percent to 8.90 percent.

[Related -What does Istanbul have to do with AAPL?]

Analysts, on average, expect Microsoft's third-quarter revenue to be $17.18 billion, up 4.6 percent from $16.43 billion generated in the third quarter of last year.

The Street has a cautious stance on Microsoft due to lower PC shipments on lack of demand and hard disk drive shortages arising from Thailand floods. However, better-than-expected PC shipments data and easing of HDD shortages could pacify analysts' concerns.

PC shipments have shown signs of recovery amid easing of hard disk drive constraints. On better-than-expected growth in the EMEA region, global PC shipments have grown 1.9 percent in the first quarter, according to Gartner. The results exceeded Gartner's earlier projections of a 1.2 percent decline for the quarter.

The year 2012 is crucial for Microsoft as it will see the launch of Windows 8, the beta launch of Office 15, and decide the fate of Windows Phone, which recently hit a roadblock as some of the Lumia 900 phones shipped to the United States had a software glitch, preventing the smartphone from connecting to the Internet.

[Related -How To Earn 30% A Year From Microsoft -- Without Buying A Single Share]

Microsoft  is led by CEO Steve Ballmer and gets a majority of its revenues from sales of Windows operating system. Windows sales have been flat in recent quarters as customers are stalling the purchase of Windows 7 for the upcoming Windows 8. This could impact sales of Windows and the Windows Live Division for the third quarter, but once Windows 8 launches, the segment could witness exponential growth in revenues.

Windows 8 could prove to be an even greater driver of multiple expansion as it enables Microsoft to break free of the PC-sale shackles and monetize the explosive tablet opportunity. Research firm Gartner expects 103 million tablets to ship in 2012 growing to 326 million units by 2015.

Investors have been largely looking past the weak PC market and near-term pressures on the Windows division as the release of Windows 8 and the launch of Ultrabooks should snap PC sales out of their funk and re-accelerate growth in the company's highest margin division.

Despite the slowdown.


Next Page >>12
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageMBIA Inc. (MBI) : BTI's $12 a Tough Task

MBIA Inc. (NYSE:MBI) is doing well on a day stocks are struggling The guarantee insurance company is the read on...

article imageUrban Outfitters, Inc. (URBN) Q2 Earnings Preview: A Snug Fit

Urban Outfitters, Inc. (NASDAQ:URBN) will hold a webcast to discuss its second quarter of fiscal-year 2015 read on...

article imageEstee Lauder Companies Inc. (EL) Q4 Earnings Preview: Options Player Betting On EL’s EPS Looking Pretty

Estee Lauder Companies Inc. (NYSE:EL) will release fiscal 2014 fourth quarter and full year financial read on...

article imageHerbalife Ltd. (HLF): 3 Reasons To Pay Attention to Recent Insider Buying

Well, well, well… it looks as if boardroom buyers viewed the recent selloff as an opportunity to buy. read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.