Microsoft Corp. (NASDAQ: MSFT): Q4 Earnings Preview 2011

Microsoft Corporation (NASDAQ: MSFT), the world's largest software maker, is scheduled to release its fiscal fourth-quarter earnings after the closing bell on Thursday, July 21, 2011. Analysts, on average, expect the company to report earnings of 58 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 $16.04 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 third-quarter, the Redmond, Washington-based company's net income was $5.2 billion, or 61 cents per share, compared to $4.0 billion, or 45 cents per share, in the year-ago quarter. Revenue climbed 513% to $16.43 billion from $14.50 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 56 cents per share on revenue of $16.19 billion.

At its last earnings call in April, the company reaffirmed operating expense guidance of $26.9 billion to $27.3 billion for the fiscal year ending June 30, 2011. Microsoft also provided preliminary fiscal year 2012 operating expense guidance of 3% to 5% growth from the mid-point of fiscal year 2011 guidance, or $28.0 billion to $28.6 billion.

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. Revenue in the division that includes the Windows software has fallen from the previous year in each of the previous two quarters, intensifying the pressure on the company to show growth in the April-June period.

Research firms IDC and Gartner recently published data suggesting that shipments of personal computers rose between 2.3% and 2.6% in the second quarter.

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.  Microsoft has reassured many that it’s serious about the tablet market, thanks to the company’s recent announcement that it will develop its software to be compatible with semiconductor technology developed by partners of ARM Holdings PLC (NASDAQ: ARMH), which predominates in the tablet market.

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. More than 50,000 businesses have signed up for Office 365 since its launch.

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. 

The company recently agreed to acquire internet communications company Skype Technologies SA for $8.5 billion in cash from an investor group led by Silver Lake.  It is expected to enhance Microsoft's existing portfolio of real-time communications products and services. As part of the deal, Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft said it will continue to invest in and support Skype clients on non-Microsoft platforms. Also, the acquisition is expected to give Microsoft a boost in the enterprise collaboration market as Skype's voice, video and sharing capabilities would enable Microsoft to better compete against rivals like Cisco Inc. (NASDAQ: CSCO) and Google.

Full Disclosure: None.

Microsoft Corp. (NASDAQ: MSFT): Q3 Earnings Preview 2011

Microsoft Corporation (NASDAQ: MSFT), the world's largest software maker, is scheduled to release its fiscal third-quarter earnings after the closing bell on Thursday, April 28, 2011. Analysts, on average, expect the company to report earnings of 56 cents per share on revenue of $16.19 billion. In the year ago period, the company reported earnings of 45 cents per share on revenue of $14.50 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 second-quarter, the Redmond, Washington-based company's net income was $6.63 billion, or 77 cents a share, compared to $6.66 billion, or 74 cents a share, in the year-ago quarter. Revenue climbed 5% to $19.95 billion from $19 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 68 cents per share on revenue of $19.14 billion. 

The company is able to rely on the resilience of its flagship Windows and Office software to help it turn in consistently strong earnings reports

Microsoft’s mobile platform faces stiff competition from both Apple’s iPhone, and Google Inc.’s (NASDAQ: GOOG) increasingly popular Android mobile software. Early in February, Finland-based Nokia said it is forming a broad strategic partnership with Microsoft to use their complementary strengths and expertise to create a new global mobile ecosystem. Nokia will adopt Windows Phone as its principal smartphone strategy and Symbian will become a franchise platform. The agreement for the more than a billion-dollar payment is said to be part of a campaign by Microsoft to keep Nokia from choosing Google Inc.'s Android operating system. Microsoft will offer some money up front to help Nokia market and develop the phones. Nokia, in turn, will pay a fee to Microsoft for each copy of Windows used in its phones, in addition to the right to use some of Microsoft's patent portfolio. Nokia's royalty payments are expected to help Microsoft make a profit on the deal even after the payments to Nokia. The deal is expected to benefit both companies financially while helping stave off smartphone competition from Apple and Google.

Similarly, 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.  Microsoft has reassured many that it’s serious about the tablet market, thanks to the company’s recent announcement that it will develop its software to be compatible with semiconductor technology developed by partners of ARM Holdings PLC (NASDAQ: ARMH), which predominates in the tablet market.

The company is trying hard to capture a bigger share of the online search advertising market. Microsoft unveiled its revamped Bing search engine in 2009, and has had Bing placed behind Yahoo’s search service, in a revenue-sharing arrangement designed to help Microsoft gain ground more quickly on Google. Microsoft and Yahoo held a combined 30% share of the U.S. search market in March, according to comScore Inc. data, compared with a more than 65% share enjoyed by Google.

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.

The company's stock currently trades at a forward P/E (fye Jun 30, 2012) of 9.61 and PEG ratio (5 yr expected) of 1. In terms of stock performance, Microsoft shares have lost 14 percent over the past year.

Full Disclosure: None.

Microsoft Corporation (NASDAQ: MSFT): Q2 Earnings Preview

Microsoft Corporation (NASDAQ: MSFT), the world's largest software maker, is scheduled to release its fiscal second-quarter earnings after the closing bell on Thursday, January 27, 2011. Analysts, on average, expect the company to report earnings of 68 cents per share on revenue of $19.14 billion. In the year ago period, the company reported earnings of 74 cents per share on revenue of $19.02 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 first-quarter, the Redmond, Washington-based company's net income was  $5.4 billion, or 62 cents a share, compared to $3.6 billion, or 40 cents a share, in the year-ago quarter. Revenue climbed 25% to $16.2 billion from $12.92 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 55 cents per share on revenue of $15.81 billion. 

The company has benefited from solid enterprise growth and continued strong consumer demand for Office 2010, Windows 7, and Xbox 360 consoles and games. Microsoft launched its Kinect motion camera accessory in November, and at CES, the company announced it had moved 8 million units in just 60 days, making it a hit. Another new product for this quarter is Microsoft's Windows Phone 7, which was launched in Europe in late-October of last year and in the U.S. and Canada during the second week in November, giving it only a few weeks to make it into this quarter's records. Microsoft has kept fairly mum on Windows Phone 7 sales since launch, short of saying that it had sold more than 1.5 million of the devices to mobile operators (though not necessarily end users) within its first six weeks on the market.

Microsoft needs to regain momentum in the mobile computing sector as Apple’s iPad and a host of competing slate or tablet devices are poised to reshape the software industry. Steve Ballmer, chief executive officer of Microsoft Corp., recently laid out an aggressive vision for the company’s flagship Windows platform, saying he intends for the software to power a range of consumer devices with no loss in performance from its typical PC environment.

The company is trying hard to capture a bigger share of the online search advertising market. Since it launched Bing in June this year, Microsoft has been steadily gaining ground. According to comScore, Microsoft’s Bing reached an all-time high market share of 12 percent in December from 11.8 percent in November 2010.

Microsoft is also taking initial steps towards cloud computing to counter a threat from Google and others.

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Microsoft Corporation (NASDAQ: MSFT): Q2 Earnings Preview 2010

Microsoft Corporation (NASDAQ: MSFT), the world's largest software maker, is scheduled to release its financial results for second quarter of fiscal year 2010 after the closing bell on Thursday, January 28, 2010. Analysts, on average, expect the company to report earnings of 59 cents a share on revenue of $17.84 billion. In the year ago period, the company posted earnings of 47 cents per share on revenue of $16.63 billion.

Microsoft Corporation develops, manufactures and supportes a range of software products and services for different types of computing devices. It has five business segments: Client, Server and Tools, Online Services Business, Microsoft Business Division, and Entertainment and Devices Division.

In October, the Redmond, Washington-based company reported that its fiscal first quarter net income fell 11 percent to $3.574 billion or $0.40 per share, from $4.373 billion or $0.48 per share, in the year-ago quarter. Revenues fell $12.92 billion from $15.06 billion. Analysts, on average, expected the company to report earnings of $0.32 per share on revenue of $12.32 billion. In November, Microsoft cut its full year 2010 operating expense guidance to $26.2 billion to $26.5 billion, from the prior range of $26.6 billion to $26.9 billion.

Microsoft Corp. officially released the latest version of its operating system Windows 7 on October 21, aiming to win back customers disappointed by Vista and strengthen its hold on the PC market. In November, the software maker said its sales of Windows 7 hit record levels. The company is poised to benefit from a rebound in PC market. Worldwide personal computer shipments in the fourth quarter of 2009 increased 22.1% year-on-year to 90 million units, according to preliminary results by Gartner Inc. The technology research firm said that it was the strongest year-over-year growth rate that the worldwide PC market has experienced in the last seven years.

The company is trying hard to capture a bigger share of the online advertising market. In July, Microsoft announced a search collabaration with online search engine Yahoo Inc. Last month, Microsoft Corp. said that it has finalized and executed the online search and advertising deal with software giant Yahoo! Inc. The two companies expect to close the transaction in early 2010. Since it launched Bing in June, Microsoft has steadily if slowly been gaining ground. According to a report by comScore the company's share of searches in the U.S. reached 10.7 percent last month, up 0.4 percentage points from November.

Among other events during the final three months of last year, Microsoft made two acquisitions. In December, the software firm acquired systems management vendor Opalis Software for about $60 million. It also agreed to buy Sentillion Inc., a privately held company in Andover that specializes in software for the health care industry.

Last month, the software maker declared a quarterly dividend of $0.13 per share. The dividend is payable March 11, 2010 to shareholders of record on February 18, 2010.

The company's stock currently trades at a forward P/E (fye 30-Jun-11) of 14.02 and PEG ratio (5 yr expected) of 1.45. In terms of stock performance, Microsoft shares have gained 67 percent over the past year.

Full Disclosure: None.