Microsoft set to report quarterly earnings after the bell

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Satya Nadella, chairman and chief executive officer of Microsoft Corp., speaks during the virtual Meta Connect event in New York on Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images

Microsoft will report fiscal third-quarter earnings after the close of regular trading Tuesday.

Here are the key numbers to watch:

  • Earnings: $2.23 per share, adjusted, as expected by analysts, according to Refinitiv.
  • Revenue: $51.02 billion as expected by analysts, according to Refinitiv.

Revenue is projected to be up 3% from a year earlier, which would mark a second straight quarter of growth below 10%. Before that, percentage expansion had been in double digits in every quarter since 2017.

Results are expected to be weakest in Microsoft’s personal computing division, which includes Windows operating system licenses sold to PC makers, along with Xbox consoles and Surface devices. Research firm Gartner estimated that PC shipments declined 30% in the quarter.

Microsoft’s Azure cloud business remains a bright spot for the company, but growth is slowing. Analysts surveyed by CNBC expect 26.5% growth from a year earlier, while analysts polled by StreetAccount predict 27.2% growth. Microsoft doesn’t disclose the size of its Azure business in dollars.

In the fiscal second quarter, revenue from Azure and other cloud services grew by 31%, down from 35% in the prior period.

Investors have another reason to be excited about Azure, which has aligned itself with ChatGPT creator OpenAI.

During the quarter, Microsoft announced a new multibillion-dollar investment in OpenAI and said it would draw on the company’s artificial intelligence models for a new version of its Bing search engine and enhancements to the Microsoft 365 productivity software.

Microsoft shares have risen 17% so far this year, while the S&P 500 index is up less than 8% over the same period.

Executives will discuss the results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET.

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