Microsoft Corporation (NASDAQ:MSFT) revealed its earnings report for the first three months of 2013 today, April 18th, after the market closed. The company revealed that it had earned $0.72 per share in the first quarter, on revenue of $20.49 billion.
In anticipation of the report, analysts were looking for earnings of $0.68 per share from the company on revenues totaling $20.47 billion. In the first quarter of 2012, the company earned $0.60 per share on revenues of $17.4 billion. Whisper numbers in the hours leading up to the release of the earnings report indicated that Microsoft Corporation (NASDAQ:MSFT) was likely to beat analysts estimates.
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The biggest indication for Microsoft Corporation (NASDAQ:MSFT) in the coming year is the adoption rates of the company’s Windows 8 operating system, particularly in the enterprise sector. If the company can drive business toward Windows 8 tablets and desktops, the firm’s bottom line will impress.
There are several headwinds faced by the company, however. The PC market is slowing down, indicating that Windows 8 adoption could take longer than had been hoped, though the firm may make some headway in the mobile sector. It is still a small player in a rapidly congesting market.
Analysts are afraid that the smartphone market is already saturated in Western countries leaving the likelihood of Microsoft Corporation (NASDAQ:MSFT) driving into the market, and gaining a significant market share, shrinking. Its partner, Nokia Corporation (NYSE:NOK), has not been doing well in recent months, and delivered a terrible earnings report today, meaning the company’s smart phone sales could be very poor.
Many analysts are still very positive about the company’s prospects, despite the negatives that surround it. One of the strategies that has been seen by analysts as a plausible path for the firm is the proliferation of cheap touch based computers. That could drive Windows 8, and Windows Phone 8, adoption, and help Microsoft Corporation (NASDAQ:MSFT) meet its goals.
So far in 2013, the company’s stock has seen a reasonable return, rising by more than 7.5%, in line with the S&P 500. Analysts will be looking for serious improvements in both revenue and earnings this year if investors are to continue buying the stock. Microsoft Corporation (NASDAQ:MSFT) needs to adapt to a changing market, today’s report is the first indication that it might just be alright, despite being out of its depth.