Microsoft is scheduled to release its next earnings report on Jan. 26, and analysts are starting to release their updated estimates. The general consensus on Wall Street suggests earnings per share of 71 cents on revenue of $26.3 billion for the second fiscal quarter of 2015.

Microsoft Earnings Preview: Slight Miss Expected

No major surprises expected from Microsoft

In a report dated Jan. 21, RBC Capital Markets analysts Ross MacMillan and Matthew Hedberg said they’re a bit behind consensus estimates, but they remain positive on the technology giant. They maintained their Outperform rating and $53 per share price target ahead of next week’s earnings report.

They’re expecting to see earnings of 69 cents per share on $26 billion in revenue. The main reason their estimates are behind those of Wall Street’s is because of their revenue estimates for Microsoft’s devices and hardware division and commercial and other.

What to focus on in Microsoft’s earnings report

They provided a list of several things they’ll be focusing on in Microsoft’s earnings report. One is D&C Licensing because of the “benign PC unit backdrop.” Also they say the shift toward units with lower average selling prices compared to the relative strength of consumer PCs and the impact of falling royalties from Android make this metric important.

They’ll also be watching for hardware margins in this segment. They’re expecting a margin of 10% but think Windows Phone could positively surprise. They’re not so convinced Microsoft will do well in gaming, however, because the company has slashed prices on the Xbox.

The RBC Capital team also wants to see continued strength in commercial billings as both commercial licensing and other, including cloud services, revenue keep growing. They do note, however, that this segment will probably see pressure from the strengthening of the U.S. dollar.

They also point out that Microsoft doesn’t tend to be too transparent regarding the mix of foreign currency. Also because the company uses an annuity licensing model, currency headwinds will appear in deferred and billings metrics before they appear in revenue. Also they point out that Microsoft uses a “rolling translation hedge program,” which keeps foreign exchange impacts difficult to gauge.