What to expect from Microsoft’s first quarter earnings

Microsoft is set to release its first quarter (fiscal year) earnings this Thursday, implying that it is high time we kicked the tires and looked into that the market and leading investors are expecting from the software giant.

To start things off, according to StreetInsider, the market is anticipating price movement that is greater than average: “October put option implied volatility is at 32, November is at 26; above its six-month average of 28.” This means that investors are expecting Microsoft’s stock to be more active than it has been in the past. Whether that is in an up, or down direction, remains to be seen.

Investors.com noted that this is a very active week for the biggest of tech stocks, with reports coming from Apple, IBM, Microsoft, VMWare, and Intel all landing shortly. Early poor earnings from any of those companies could drag down the stocks of their competitors. This leaves a window open for any of the five to stand out, assuming that the others lean weak.

But what are we to expect from the company, in terms of pure numbers from the quarter? Forbes has put together the master list, from which we find the highlights to be:

• Earnings per share should be up 9.7% from the same quarter last year, or 68 cents per share.
• Two thirds of analysts rank Microsoft as a buy.
• Microsoft’s stock has fallen from ten cents over the quarter, or essentially it has been flat.
• Revenue of $17.25 billion is anticipated, up 6.5%.

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Or, everything is moving along in Microsoft-land, but nothing looks to be performing at levels of high growth. In other words, all is normal for the company. As of this moment, Microsoft’s PE ratio is back under ten. Oddly, given that the company’s EPS growth rate is roughly ten, in a way the firm’s PEG ratio is on track (roughly, obviously). Microsoft needs to ignite an engine of growth somewhere, or it’s stock is likely set to stay where it is: stuck.