Microsoft is well-known for its operating systems and what its founder Bill Gates have done for the company from the early beginning, but that part of the company is not the best performing part anymore.
We all know that the PC business in declining as demand continues to wane. But Microsoft`s stock has increased. The stock peaked in 1999, and have never yet recovered. Until now. The stock is trading near its 1999 level.
The focus has shifted from PC sales to its growing cloud business. Just like Google and Amazon, Microsoft are among the few leaders in the cloud business. Their cloud business includes Office 365, Dynamics CRM and Azure, and they all reported gains of over 5 percent last quarter.
Microsoft will report after the close on Thursday 19, and its expected to hear that CEO Satya Nadella will talk about their latest acquisition; LinkedIn. Whats interesting is to hear how they are planning to integrate LinkedIn into their core business, because investors are a little bit confused about the valuation of the company after the acquisition.
Other things to look for is how Microsoft`s business will be hit by Brexit, because about 7 percent of their business comes from UK alone. On top of that there is a strong dollar, so this is something that will have an impact to the bottom line for Microsoft.
The Estimize consensus is calling for earnings per share of 55 cents on $13,56 billion in revenue, which is 2 cents higher that Wall Street on the bottom line and nearly in-line on the top. Compared to a year earlier, this represents a 2 percent decline in earnings while sales could grow by 3 percent.
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Shiny bull 