He’s in his honeymoon period as Microsoft CEO, but can Satya Nadella win over Wall Street?
The company’s new leader will take part in Microsoft’s quarterly earnings conference call for the first time on Thursday afternoon — giving him an opportunity to start making his case to an audience that his predecessor struggled to win over.
With Microsoft’s stock price currently hovering close to $40/share, investors have already been reacting favorably to the moves announced by the company during Nadella’s three months on the job, even if some those initiatives — such as the decision to develop Office for iPad — actually predated his tenure.
But on the call, he’ll be grappling with the realities of Microsoft’s business, most notably the declining market for traditional PCs and notebooks.
Meanwhile, the company’s move into hardware and device development will be cutting into Microsoft’s profit margins. That phenomenon will be accelerated by the acquisition of Nokia’s devices and services business, a deal that is expected to close on Friday.
The bar isn’t high for Microsoft’s results. Analysts polled in advance by Thomson Reuters expect quarterly revenue to be down slightly, at $20.4 billion. Earnings are projected to come in at 63 cents per share, a decline of 13 percent compared with the same quarter a year ago.
Just the fact that Nadella will be on the call is a sign of the new era at the company. Ballmer talked on conference calls with analysts, investors and press when the company had big news to discuss, but the former Microsoft CEO wasn’t a regular on the quarterly earnings call.
Expect Microsoft finance chief Amy Hood to handle the nitty-gritty financial details of unearned revenue and gross margins, with Nadella talking about the state of Microsoft in broader terms.
Microsoft releases its results after the market closes Thursday afternoon, with the conference call starting at 2:30 p.m. Pacific. Check back for full coverage on GeekWire.