Microsoft (MSFT) Q2 2023 Results

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Microsoft will release second-quarter financial results after regular markets close on Tuesday.

Here’s what experts expect:

  • Revenues: $2.30 per adjusted share, according to Refinitiv.
  • Returned: $52.96 billion, according to Refinitiv.

Sales growth is expected to be just 2.3% for the year, which would be Microsoft’s weakest growth since 2016.

The company faces problems at all levels. When CEO Satya Nadella announced 10,000 job cuts last week, he noted that customers in all sectors around the world were wary of the risk of recession.

As of Monday’s close, Microsoft shares had fallen 18% in the past year, slightly underperforming the Nasdaq.

The growth engine of Microsoft’s Intelligent Cloud block is the Azure public cloud. In October, executives said the company’s engineers are busy helping customers make better use of Azure infrastructure services. Last week, Nadella wrote that “now we’re seeing them optimize their digital spending to spend less.”

Microsoft’s Windows business, which is mostly in the personal computing division, expects the PC market to decline. Technology researcher Gartner estimated that in the fourth quarter of 2022, the PC business will see its slowest growth since the company began tracking the market in the mid-1990s.

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

Raymond James analysts wrote in a note to clients on Monday that the decision to cut staff “reflects a commitment to protect margins despite the fragility of earnings.” They offer to buy Microsoft shares.

Microsoft said the layoffs, hardware restructuring and lease consolidation charges would result in a charge of $1.2 billion and a negative impact on earnings of 12 cents per share.

SEE: Oppenheimer’s Horan says Microsoft has a history of great secular growth over the long term.

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