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Microsoft Q1 Earnings and Revenues Beat Estimates

Microsoft beats earnings estimates with quarterly earnings of $2.99 per share, representing a surprise of 12.83%.

Microsoft (MSFT) has reported quarterly earnings of $2.99 per share, surpassing the Zacks Consensus Estimate of $2.65 per share. This is an increase from earnings of $2.35 per share in the same quarter last year. These figures have been adjusted for non-recurring items.

This quarterly report has exceeded expectations by 12.83%. In the previous quarter, analysts predicted earnings of $2.54 per share, but Microsoft delivered earnings of $2.69 per share, resulting in a surprise of 5.91%.

Over the past four quarters, Microsoft has consistently outperformed consensus EPS estimates.

In terms of revenue, Microsoft generated $56.52 billion for the quarter ended September 2023, surpassing the Zacks Consensus Estimate by 3.90%. This is an increase from revenues of $50.12 billion in the same period last year. Microsoft has exceeded consensus revenue estimates three times in the past four quarters.

The future performance of Microsoft's stock will largely depend on management's commentary during the earnings call, as well as the sustainability of the company's recent financial results and future earnings expectations.

Since the beginning of the year, Microsoft shares have gained approximately 37.3%, outperforming the S&P 500's gain of 9.8%.

Investors are now wondering what the future holds for Microsoft's stock. While there are no definitive answers, one reliable measure to consider is the company's earnings outlook. This includes current consensus earnings expectations for upcoming quarters, as well as any recent changes in these expectations.

Research has shown a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions themselves or rely on tools like the Zacks Rank, which has a proven track record of utilizing earnings estimate revisions to predict stock performance.

Currently, the estimate revisions trend for Microsoft is mixed. While this could change following the recent earnings report, the current status translates to a Zacks Rank #3 (Hold) for the stock. This suggests that the stock is expected to perform in line with the market in the near future.

It will be interesting to see how earnings estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $2.63 on $58 billion in revenues for the upcoming quarter, and $10.90 on $233.76 billion in revenues for the current fiscal year.

Investors should also consider the outlook for the software industry, as it can significantly impact the performance of Microsoft's stock. Currently, the Computer - Software industry ranks in the bottom 43% of the 250 plus Zacks industries. Research has shown that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1.

Another company in the same industry, DecisionPoint Systems Inc. (DPSI), has yet to report its results for the quarter ended September 2023. Analysts predict that DecisionPoint Systems will post quarterly earnings of $0.07 per share, representing a year-over-year change of -56.3%. The consensus EPS estimate for the quarter has remained unchanged over the past 30 days. Revenues for DecisionPoint Systems are expected to be $28.1 million, up 9.3% from the same quarter last year.

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