Earnings of Microsoft: Investors Looking for Signs of Business Recovery
By: Ashwathy Nair
- Pandemic hurt sales to small businesses & sparked global semiconductor shortage.
- A 41.4% rise in Azure sales is being expected by the analysts.
- In November, Microsoft launched two new Xbox models.
On Tuesday, when Microsoft Corp. states that investors are searching for indicators that big companies are still investing in cloud computing, smaller businesses are beginning to rebound, and Xbox revenues will be hampered by chip shortages.
The Washington-based company, The Redmond is a winner of the pandemic-driven move from home to work and learning, with corporations and schools embracing their tools for team coordination and transferring several other applications to the cloud. But the pandemic also affected small business sales and caused a global shortage of semiconductors, analysts said.
As per Visible Alpha, the growth of Azure will be tracked by investors, which is a cloud computing business of Microsoft that competes with Amazon Web Services of Amazon.com and Google cloud of Alphabet Inc. is expecting a rise of 41.4 per cent in Azure sales.
From one-time initiatives at larger corporations to sales of apps such as Office to small businesses, they will be searching for signs of a resumption of stalled investment.
In a note, Evercore ISI analyst Kirk Materne wrote that “we will be looking for both a growing bookings number as well as positive qualitative management guidance in order to point towards the worst being behind us and customers of all sizes are now involved deeply into digital transformation conversations.”
In November, two new Xbox models were being launched by Microsoft, and it was stated by the Chief Financial Officer Amy Hood that the company expected only 40 per cent gaming hardware revenue growth because of supply constraints.
Analysts stated that the new consoles are also a substantial factor in the progress of subscribers to GamePass, Microsoft’s $10 per month gaming service that had 15 million subscribers as of September.
According to IBES data from Refinitiv’s as of 25th January, Overall, analysts expect Microsoft to post $40.18 billion in fiscal second-quarter revenue and $1.64 in earnings per share on Tuesday.