Microsoft Corporation (NASDAQ: MSFT), the world's largest software maker, is scheduled to release its fiscal first-quarter earnings after the closing bell on Thursday, October 20, 2011. Analysts, on average, expect the company to report earnings of 68 cents per share on revenue of $17.25 billion. In the year ago period, the company reported earnings of 51 cents per share on revenue of $16.20 billion.
Microsoft Corporation develops, manufactures, licenses, and supports a range of software products and services for various computing devices worldwide. The company is organized into five operating segments: Windows and Windows Live, Server and Tools, Online Services, Microsoft Business, and Entertainment and Devices.
In the preceding fiscal fourth-quarter, the Redmond, Washington-based company's net income was $5.87 billion, or 69 cents per share, compared to $4.52 billion, or 51 cents per share, in the year-earlier quarter. Revenue climbed to $17.37 billion from $16.04 billion. Analysts, on average, expected the company to report earnings of 58 cents per share on revenue of $17.25 billion.
The company recently announced 25% increase in its quarterly dividend in a bid to lift its stagnant stock price.
Though Microsoft operates in a number of markets, including online advertising and video game systems, its financial results are still dominated by the business units that includes its Windows operating system software and Office software suite. In May, the company previewed the upcoming version of its new Windows operation system, internally code-named Windows 8 that focuses on optimization for touchscreen hardware, including tablet PCs. Windows 8 is expected to launch in 2012. It will be a unified OS for computers as well as tablets. We can also expect to see some news about that in the earnings preview.
However, Microsoft’s mobile platform faces stiff competition from both Apple’s iPhone, and Google Inc.’s (NASDAQ: GOOG) increasingly popular Android mobile software. In February, Microsoft and Nokia Corp. (NYSE: NOK) announced a broad strategic partnership under which Nokia will use adopt Windows Phone as its principal smartphone strategy and Symbian will become a franchise platform. Microsoft has received some criticism for being slow to attack the tablet market as Apple’s iPad and a host of competing slate or tablet devices are poised to reshape the software industry.
Last month, the company signed a definitive agreement with Samsung Electronics Co. Ltd. to cross-license the patent portfolios of both companies, providing broad coverage for each company's products.
The company is trying hard to capture a bigger share of the online search advertising market. Bing currently has slightly less than 4% market share worldwide while Yahoo Search which is powered by Bing has close to 6% global market share. While Bing’s combined market share is much lower than Google, it is growing year over year with deals like the partnership with Baidu (NASAQ: BIDU). Microsoft is already having a a search-advertising partnership with Yahoo Inc.(NASDAQ: YHOO).
Microsoft is also taking initial steps towards cloud computing to counter a threat from Google and others. The company recently launched beta version of its Office 365 applications, which include Web-hosted email and other tools available via subscription. With the launch of Office 365, Microsoft hopes to become the dominant player in the cloud based productivity software market which is currently led by Google.
Meanwhile, The Xbox 360 with the Kinect addon has been a huge hit and has been the number one selling console in the United States for over an year now.
Full Disclosure: None.