Microsoft CEO Satya Nadella. (Microsoft file photo)
Microsoft CEO Satya Nadella. (Microsoft file photo)

The cutbacks have been announced, the strategic direction has been outlined, and now Microsoft CEO Satya Nadella has the job of filling in the details — explaining to investors how he plans to put the company back on track.

Today is earnings day for Microsoft, as the company reports its results for the quarter and fiscal year ended June 30. Analysts surveyed by Thomson Reuters are expecting the company to report a 15 percent increase in revenue for the quarter, to $23 billion, although they predict that earnings will dip 9 percent to 60 cents per share.

Lumia-Cyan-update_featNadella, who has been on the job for five months, is speaking on the earnings call this afternoon. He promised in his companywide memo two weeks ago to say more today on “what we are doing in FY15 to focus on our core.” 

Microsoft typically reports earnings on Thursday afternoon, but shifted to Tuesday this quarter to allow Nadella to attend and address employees at MGX, the company’s giant internal sales and marketing conference later this week.

As a result, the company will effectively be going up against Apple, which also reports its earnings this afternoon.

This is the first earnings report since Microsoft completed its $7.2 billion acquisition of Nokia’s smartphone business. The expected decline in earnings reflects the challenge Microsoft faces as it absorbs the Nokia division and gets further into the business of making hardware — a much lower-margin endeavor than Microsoft’s traditional business of making operating systems and applications.

This is why some Wall Street analysts are looking for Microsoft to officially declare that it’s stepping back from some aspects of Nokia’s business. The company has already signaled plans to wind down Nokia’s basic handset business, and Android’s Nokia X devices, focusing instead on Windows Phone.

In the core part of Microsoft’s business, an improving outlook for PC sales could help the company, although that improvement is very modest, and relative. Global PC shipments rose 0.1 percent in the second quarter, to 75.7 million units, but the total number of PC shipments is still well below the more than 85 million units registered by the industry in the same quarter in 2012.

In the previous quarter, ended March 31, Microsoft saw revenue growth in cloud services such as Office 365 and Windows Azure, in addition to Windows volume licensing and productivity server products Lync, SharePoint and Exchange.

The quarterly results will also bring a fresh look at Microsoft’s Xbox One sales, which have improved thanks to a new pricing structure, but still lag the PlayStation 4 overall.

Microsoft reports earnings after the market closes this afternoon, and its conference call with analysts takes place at 2:30 p.m. Pacific time, available for streaming on the company’s investor relations site. Check back for coverage on GeekWire.

Comments

  • TX_PNW

    a joke with two words? Windows. Phone.

    I guess if you cannot stand the large selection of apps in iTunes and Google Play store has too much of a selection….. go and get a windows phone…. Sorry – between iOS and Android…. Windows Phone is like a giant 3rd wheel…

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