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What to Expect from Microsoft’s Second-Quarter Earnings

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Microsoft’s second-quarter earnings

Microsoft (MSFT), a leading player in the enterprise software space, is scheduled to announce its second-quarter earnings on January 30, 2019, after the market closes. According to IBES estimates, Microsoft is expected to post revenue and non-GAAP EPS of $32.504 billion and $1.092, respectively.

For its second quarter, Microsoft guided revenue in the range of $31.9 billion to $32.7 billion, which implies YoY growth of 10% to 13%.

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Microsoft’s earnings could boost market sentiment                        

As the above chart shows, Microsoft stock is trailing behind all the major US indices in this year to date. As of January 28, the S&P 500 Index (VOO) was up 5.3%, while the NASDAQ Composite Index and the Dow Jones Industrial Average were both up 5% and 6%, respectively.

If Microsoft’s second-quarter earnings and guidance for the current quarter turn out to be better than expected, its stock could rise and boost the entire market.

Microsoft through its offerings Azure, Office 365, and Dynamics 365 is rapidly making a stride in the consolidated and competitive cloud space (IBM), where Amazon’s (AMZN) AWS (Amazon Web Services) is a leader.

Amid fear of global slowdown due to weakness in China (FXI) and the partial government shutdown, the market and investors are eagerly awaiting some positive news that could lift the overall sentiment of the market. US-China trade talks, which are expected to resume this week, could also be a potential catalyst that could significantly move the market.

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