Microsoft will release its fourth quarter earnings at 2:30 PDT this afternoon in a conference call with CEO Satya Nadella and CFO Amy Hood. The conference call will be made available as a broadcast on Microsoft’s Investor Relations website. During the call, Microsoft will undoubtedly paint the picture of how its recently announced write-off of their Nokia acquisition, and the subsequent restructuring of its phone business, affected the company’s financials in the fourth quarter.
The Wall Street Journal has put together a summary of what analysts are expecting to hear on today’s earnings call. An average of analyst estimates suggests that after accounting for the $7.6 billion write-down, Microsoft will post a loss of 30 cents a share. However, if the write-off and other one-time items are excluded from the calculations, the average estimate for earnings is up to a gain of 56 cents a share.
The average of analyst’s expectations also predict revenue will drop by 6% due to decreased Windows and Office sales caused by the overall decline in PC sales.
While the reporting of a loss of $7.6 billion is never easy to the hear news for investors, the one-time write-off enables Microsoft to refocus their mobile efforts. Microsoft’s new restructuring hopes to clear the way for their phone business to be a narrower and more sustainable operation. Moving forward, Microsoft’s phone services are expected to help reinforce growth in its other profit centers as well.
The Wall Street Journal’s coverage goes on to say the three things to watch for in today’s earnings call. Investors will be looking at the reboot of Microsoft’s mobile business post the write-off, news of Windows 10 which analysts aren’t expecting to do much for PC sales, and Microsoft’s successful growth in enterprise cloud services. While investors may be on the lookout for news of growth in enterprise and cloud services, the results may be mixed because Microsoft has to keep doubling in sales to show a lift in stock prices.
If analysts react harshly to the earnings call should investors hold faith in Microsoft’s plans for the new fiscal year with the launch of Windows 10 and a realigned phone business? Let us know what you think in the comments section and stay tuned to WinBeta as we cover the impact of today’s earnings call.Further reading: Fourth Quarter Earnings, Microsoft, Nokia Write Off