November 01, 2022: -Microsoft will report financial first-quarter results after the market closes on Tuesday.
Analysts have lowered their estimates in the latest weeks because of a decline in PC unit shipments and the stronger U.S. dollar.
Analysts are examining $49.61 billion in revenue from Microsoft in the fiscal first quarter, which ended on September 30. That would represent 9.5% revenue growth yearly, which would be the slowest growth since 2017. In July, Microsoft’s finance chief, Amy Hood, told analysts that revenue would be 2% less than it would be because of currency fluctuations.
Technology industry researcher Gartner added that PC shipments in the quarter decreased 19.5% year over year, and chipmaker AMD issued lower-than-expected preliminary quarterly results tied to a “weaker than expected PC market and significant inventory correction actions all over the PC supply chain.” A slowing PC market could cause weakness in Microsoft’s revenue from the Windows operating system.
Analysts anticipate Microsoft’s Azure cloud revenue to increase 36.4% annually, compared with 40% growth in the previous quarter, according to a survey of 14 analysts. Analysts polled by StreetAccount anticipated 36.9% Azure development.
This quarter, Microsoft began to roll out the first annual update to its Windows 11 operating system, which released the original version last year. The company said that to slow down its hiring pace, it was cutting below 1% of employees. Microsoft also spoke about Viva Engage, a portal in the Teams communication app where co-workers share video stories.
The quarterly results will include little adjustments in how Microsoft reports revenue. Revenue from HoloLens augmented-reality devices will appear in the More Personal Computing areas instead of the Intelligent Cloud segment. Microsoft has adjusted its forecast for the details by about $100 million in connection with the change.
Microsoft shares have decreased about 26% this year, while the S&P 500 stock index is down nearly 20% over the same period.
Executives will discuss the results on a conference call at 5:30 p.m. ET.