Microsoft will report results for its fiscal fourth quarter after market close on Tuesday.
Here are the key numbers to follow:
- Earnings: $2.55 per share, adjusted, as expected by analysts, according to Refinitiv.
- Revenue: $55.47 billion as expected by analysts, according to Refinitiv.
Based on analysts’ projections, Microsoft will close fiscal 2023 with revenue growth below 10% for the first time since 2017. Growth for the latest quarter is expected to come in at around 7%. Businesses have been delaying cloud and software deployments since last year due to economic uncertainty and the potential for higher interest rates.
Microsoft CEO Satya Nadella told employees in May that the company won’t lift salaries this year.
Analysts polled by CNBC and by StreetAccount expect Microsoft to report about 25% year-over-year growth in revenue from the Azure public cloud, which competes with Amazon Web Services and Google Cloud Platform. Microsoft doesn’t report Azure revenue in dollars. The projected growth rate is similar to what analysts expect from Google’s cloud division. Parent company Alphabet also reports results after the bell on Tuesday.
During the quarter, Microsoft built on its broad alliance with OpenAI to capitalize on fresh interest in artificial intelligence, following the November launch of the startup’s ChatGPT chatbot. Microsoft introduced a chatbot powered partly by OpenAI language models to help workers make sense of their employers’ data, and it told developers they’ll be able to build plugins that people can access through ChatGPT, the Bing search engine’s chatbot, and other tools.
Investors are eager for resolution in Microsoft’s arrangement to buy Activision Blizzard for almost $69 billion, which was agreed upon in January 2022. Earlier this month, an appeals court denied the Federal Trade Commission’s motion to stop the transaction. Activision shares have climbed past $92.50, close to the $95 that Microsoft agreed to pay, reflecting optimism that the deal is on track to close.
Microsoft shares have gained 44% year to date, while the S&P 500 is up 19%.
In June, Microsoft said it expected to take a $425 million charge in the quarter to pay a fine from Ireland’s Data Protection Commission after the authority looked at whether the company’s LinkedIn unit violated the European Union’s General Data Protection Regulation.
Executives will discuss the quarterly results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET.
WATCH: Microsoft is ‘naturally and legitimately’ well-positioned for A.I.: Griffin Securities