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Microsoft (MSFT) earnings Q2 2023

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Microsoft CEO Satya Nadella speaks at the corporate’s Ignite Highlight event in Seoul on Nov. 15, 2022. Nadella gave a keynote speech at an event hosted by the corporate’s Korean unit.

SeongJoon Cho | Bloomberg | Getty Images

Microsoft will report fiscal second-quarter results after the close of normal trading on Tuesday.

Here’s what analysts predict:

  • Earnings: $2.30 per share, adjusted, in line with Refinitiv.
  • Revenue: $52.96 billion, in line with Refinitiv.

Sales growth is anticipated to are available in at just 2.3% 12 months over 12 months, which could be the weakest expansion for Microsoft in any period since 2016.

The corporate faces concerns across the board. When CEO Satya Nadella announced 10,000 job cuts last week, he noted that clients in every industry world wide have taken a more cautious approach due to recession concerns.

As of Monday’s close, Microsoft shares were down 18% over the past 12 months, barely underperforming the Nasdaq.

The expansion engine of Microsoft’s Intelligent Cloud unit is the Azure public cloud. In October, executives said the corporate’s engineers were busy helping customers be more efficient with their Azure infrastructure services. Last week Nadella wrote that “we’re now seeing them optimize their digital spend to do more with less.”

Microsoft’s Windows business, housed contained in the More Personal Computing unit, is reckoning with a pullback within the PC market. Technology industry researcher Gartner estimated that throughout the fourth quarter of 2022 the PC business had its slowest growth for the reason that company began keeping track of the market within the mid-Nineteen Nineties.

The third unit, Productivity and Business Processes, comprises the Microsoft 365 productivity suite formerly generally known as Office. In recent days some analysts have said they expect slower growth in seats purchased by business customers.

The choice to scale back headcount “shows a commitment to margin defense despite top-line shakiness,” analysts at Raymond James wrote in a note to clients on Monday. They recommend buying Microsoft shares.

Microsoft said the layoffs, together with hardware lineup changes and lease consolidation fees, will end in a $1.2 billion charge and a negative impact on earnings of 12 cents per share.

WATCH: Long term, Microsoft has an enormous secular growth story, says Oppenheimer’s Horan

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