The company has a market cap of $377.14 billion and a price-to-earnings ratio of 19.35.
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Today’s report is pushing the share price down about 3.7% at $45.52 in after-hours trading. The company has yet to reclaim its $50-a-share form from last November.
Last month, Nadella unveiled the biggest management overhaul in his 18 months as CEO. Over the past 8 quarters, the company has beaten the EPS estimate 6 times. In the process, though, the Redmond, Washington company has had to make tough decisions about its strengths. “They’ve got to figure out what they want to do on the hardware side”.
Windows and the health of the PC marketEven as Microsoft transitions to a cloud- and mobile-first enterprise, the importance of its Windows business should not be overlooked. Microsoft’s new restructuring hopes to clear the way for their phone business to be a narrower and more sustainable operation.
Windows OEM revenue declined 22 percent, while surface revenue jumped 117 percent.
Microsoft isn’t out of the smartphone game.
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? The end of support refresh cycle for XP was also a factor.
Historically, Microsoft has reported lower earnings in its fourth quarter. 10 analysts rated the company as a strong buy. Developers will also be able to migrate programs more easily from Apple and Google’s mobile operating systems to Microsoft’s, but we have yet to see how that will affect consumers’ perception of Windows Phone.
Microsoft has experienced some problems recently in its Devices and Consumer (D&C) division.
Stock analysts are projecting a loss of 30 cents per share for MSFT shares, as the company could show a drop in profits for the quarter.
Meanwhile, analysts will be watching very close as Microsoft posts fourth-quarter details regarding its cloud as well as commercial licensing businesses, both of which are crucial to its growth in the future. And gaming revenue was up 62% because of Minecraft along with transactional revenue of Xbox Live climbing 58%.
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For Microsoft, the older the product and the more stale the business model, the worse it did this quarter. According to the firm, its commercial cloud revenue has grown 88 percent compared to the year-ago period. Meanwhile, closely-watched commercial revenue increased slightly to $13.5 billion, just below expectations of $13.63 billion.
