Microsoft Earnings for Q2 Will Set the Tone for 2015 (MSFT)

The Microsoft earnings for Q2 are expected after the market close today (Monday).

Investors will be looking to see if Microsoft Corp. (Nasdaq: MSFT) can maintain the momentum from its Q1 earnings. In its previous earnings, the Redmond, Wash.-based tech giant beat estimates on both the top and bottom lines.

Last year Microsoft looked stronger than it has in more than a decade. Much of the credit for the company's revival goes to new CEO Satya Nadella, who took the helm on Feb. 4.

The Q2 MSFT earnings will tell us if Nadella's strategies are working as intended. They'll also give us a hint of what we can expect in 2015.

Q2 Microsoft Earnings: The Overview

The numbers: According to Yahoo! Finance, analysts are looking for earnings per share (EPS) of $0.71, down from $0.78 a year ago. Microsoft's EPS has declined in seven of the past 10 quarters. The revenue forecast is for $26.32 billion, up from $24.52 billion in the year-ago quarter.

The last quarter: Microsoft's EPS of $0.54 beat expectations by $0.05. If you back out $0.11 of restructuring charges, MSFT's Q1 earnings would have been higher year over year as well. Revenue was $23.2 billion, beating expectations for $22 billion. It was an impressive 24.8% year-over-year increase over the $18.53 billion.

The stock: MSFT stock was down as much as 7.8% and up as much 7%, but ended the quarter almost exactly where it started. Like most stocks, MSFT felt the effects of a volatile quarter in the markets. But Microsoft stock ended the year with a gain of 25%. MSFT stock closed at $46.24 on Friday. The company raised its quarterly dividend to $0.31 from $0.28 Sept. 16. With a payout ratio of just 44% and the prospect for rising earnings in 2015, we could see another dividend hike this year.

Now here's what will matter most in the MSFT Q2 earnings:

David Zeiler

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Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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