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What to Expect from Microsoft’s Fiscal 2Q18 Earnings

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Microsoft’s fiscal 2Q18 expectations are likely to exceed analyst estimates

Microsoft (MSFT), a leading player in the enterprise software space, has now crossed the $650 billion market cap (capitalization) threshold. It’s scheduled to report its fiscal 2Q18 results on January 31, 2018. MSFT is expected to report revenues of $23.4 billion and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $0.86, according to analysts on the Estimize dashboard. These expected figures represent a YoY (year-over-year) growth of 8.8% and 3.6%, respectively.

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The chart below shows Microsoft’s track record of meeting or surpassing analysts’ expectations. In the past 15 quarters, including fiscal 1Q18, Microsoft’s quarterly revenues failed to meet analysts’ expectations only once. Looking at Microsoft’s rapid stride in the cloud and the AI (artificial intelligence) space, it’s likely that Microsoft could continue its trend of meeting or exceeding analysts’ expectations in fiscal 2Q18.

Azure and Office 365 expected to be key catalysts

Microsoft’s Azure, Office 365, and Dynamics 365 are in the cloud. Its enterprise cloud offerings provide a variety of cognitive services in vision, speech, and language. Its developer tools and AI services could further enhance its reach among existing as well as potential customers. The company’s dominance in the enterprise software space in terms of attaining government-level contracts as well as compliance could benefit its already strong presence in the cloud and overall technology space. The rapid adoption of Azure and Office 365 are expected to be the key catalysts in Microsoft’s fiscal 2Q18 earnings.

Recently, Microsoft entered into a blockchain deal with Accenture (ACN) and Bank Hapoalim. Blockchain technology underlies the foundation of cryptocurrencies such as bitcoin.

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