Microsoft will announce fiscal third-quarter earnings after market close on Tuesday.
Here’s what Wall Street is expecting:
- Earnings: $2.19 per share, adjusted, as expected by analysts, according to Refinitiv.
- Revenue: $49.05 billion as expected by analysts, according to Refinitiv.
In the quarter Microsoft announced a plan to acquire video-game publisher Activision Blizzard for $68.7 billion, the largest transaction in Microsoft’s 47-year history. Microsoft also closed its Nuance Communications acquisition and laid out a strategy for expanding in health care, an industry Nuance focuses on.
Research firm Gartner estimated that PC shipments fell 6.8% in the quarter, marking the sharpest decline since the first quarter of 2020, following a pandemic-fueled market expansion. Excluding PCs running Google’s Chrome OS operating system, which became more popular during Covid, shipments rose by 3.9%. In January, Microsoft’s finance chief Amy Hood called for high-single-digit growth in sales of Windows licenses to PC makers, even with ongoing supply shortages.
Microsoft also raised the prices of certain Office 365 productivity software subscriptions during the quarter. Organizations might have renewed subscriptions in order to get in before the increases went into effect in March.
Russia invaded Ukraine during the quarter as well, and Microsoft has disrupted Russia-backed cyberattacks aimed at Ukraine, highlighting the company’s cybersecurity capabilities. Security revenue is growing faster than any other major category where the company does business.
Microsoft shares are underperforming the S&P 500 so far this year. They’ve fallen about 17%, while the wider U.S. index has declined less than 10%.
Executives will discuss the results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET.
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