Microsoft Earnings Q2 2018 earnings preview

Microsoft Corp. reports Q2 2018 earnings after the market closes on January 31, arriving in the midst of several tech earnings in the week and the US-China trade talk in Washington.

Positive outlook

Compared to several other tech names such as Apple Inc. and Facebook Inc., Microsoft had a relatively positive 2018 with prices rising progressively to close the year up 18.7%. Certainly, there had been less as much worries over US-China trade or regulatory concerns extended to this tech company, which had seen steady growth from its core businesses. Refinitiv polls currently places the 12-month target price at $125.70, which represents a double-digit price growth, likely on the back of steady growth momentum for the company. This is accompanied by a consensus ‘buy’ rating from brokers. That said, despite the uptrend that it is expected to sustain, the match up of results against the consensus could still send ripples through to prices.

Refinitiv consensus points to earnings of $1.09 earnings per share, down slightly from $1.14 in Q1 2018. Revenue is expected at $32.49 billion from $29.08 billion in Q1 2018. This falls between the $31.9 billion to $32.7 billion guidance provided by Microsoft in their Q1 2018 earnings call.

What to watch

Breaking down the segments for Microsoft, the bulk of the revenue can be seen accounted for by its More Personal Computing and Productivity and Business Processes units in the previous quarter. Nevertheless, growth from both were not able to rival that of its Intelligent Cloud segment, encompassing the Azure unit and is also the segment which Microsoft had been shifting their focus towards. What this would mean would be that a miss here could cost Microsoft more than a further slowdown in growth for the likes of its More Personal Computing unit.

Prices had whipsawed after the Q1 2018 results release, trading higher eventually on the positive outlook from the earnings call, all due to play a part in the price trajectory here.

Related articles

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.