Microsoft's Earnings Forecast: Revenue Growth and EPS Insights

Microsoft is set to announce quarterly earnings of $3.20 per share, marking an 8.8% year-over-year increase. Revenue is predicted to be $68.38 billion, a growth of 10.6%. With recent EPS estimations revised downwards, analysts are keenly watching for market reactions.

Date: 26-04-2025

AI Rating: 6

Overview of Earnings Projections
Microsoft (MSFT) is projected to report quarterly earnings per share (EPS) of $3.20, an increase of 8.8% from the previous year. The anticipated revenue of $68.38 billion signifies a 10.6% growth compared to the prior year, showcasing the company's potential for continued expansion.

However, it's notable that the consensus EPS estimate has been revised downward by 1% in the last month. This adjustment could indicate that analysts are becoming more conservative in their outlook, and could potentially affect market sentiment. Investors often react to earnings estimate revisions, as such changes may signal the overall health or anticipated performance of a company.

Revenue Breakdown
Analysts have categorized forecast revenues into segments, which can offer deeper insights into Microsoft's business performance. The 'Productivity and Business Processes' segment is expected to generate $29.63 billion, reflecting an impressive year-over-year growth of 51.4%. However, the 'More Personal Computing' segment forecasts a decline of 18.9% to $12.64 billion, which raises concerns about the performance of Windows and associated products.

Additionally, the 'Intelligent Cloud' revenue is expected to reach $26.12 billion, displaying a slight decrease of 2.2% from last year. This indicates that while some areas of Microsoft's business are flourishing, others are underperforming compared to historical data. The 'Windows' revenue, estimated at $3.97 billion, is particularly disconcerting with a forecasted year-over-year decline of 33.1%.

Analyst Insights and Investment Considerations
Analysts highlight a general percentage change in revenue year-over-year of 10.5%, which, while a positive growth indicator, is down from the 17% reported the previous year. Lower forecast numbers in key segments could lead to a reassessment of growth expectations for Microsoft.

Overall, while Microsoft's expected earnings and revenue growth illustrate potential resilience in certain areas, the downward adjustments in EPS and concerning trends in specific revenue segments could introduce volatility around the earnings release, influencing investor sentiment and stock pricing in the near term.

Stocks: MSFT