Osprey Flyer: Microsoft Reports Quarterly Earnings on Thursday, July 21 (Financial Charts) *Financial Performance Review* MSFT

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Microsoft will report Q2 2011 financial results on Thursday, July 21

Microsoft Financial Performance Review

Microsoft will be reporting Q2 2011 financial results on Thursday, July 21, after market close. The conference call will be at 2:30 p.m. PT.

Microsoft financial performance charts for prior quarters have been posted on the Microsoft Financial Performance page and will be updated for this next quarterly report.

The Microsoft financial performance charts are:

Microsoft Performance by the Quarters

Earnings per Share (Diluted) and Cash Flow per Share

Total Revenues, Operating Income, Net Income

Gross Margin, Operating Margin, Net Margin

Return on Assets

Total Revenues and Earnings per Share Growth Rates

Microsoft Future and Past Financial Performance

Current Q2 2011 Analysts' Estimates

Yahoo Finance analysts' estimates for calendar Q2 2011 are:

Total Revenues: $17.23B average, $16.70B low estimate, $18.25B high estimate, 24 analysts

Earnings per Share: $0.58 average, $0.53 low estimate, $0.63 high estimate, 27 analysts

Current Q2 2011 Microsoft Outlook

Microsoft reaffirmed operating expense guidance of $26.9 billion to $27.3 billion for the full year ending June 30, 2011. Microsoft also offered preliminary operating expense guidance of $28.0 billion to $28.6 billion for the full fiscal year ending June 30, 2012.

Prior Q1 2011 Financial Results

When Microsoft reports calendar Q2 2011, the 3 months ended June, financial results on July 21, Microsoft should meet or beat various calendar Q1 2011 results. These financial results are charted on the Microsoft Financial Performance page. Microsoft for calendar Q1 2011, the 3 months ended March, financial results were:

Total Revenues $16.428B

Operating Income $5.709B

Net Income $5.232B

Earnings per Share - Diluted $0.61

Cash Flow per Share $1.02

Gross Profit Margin 76.28%

Operating Income Margin 34.75%

Net Income Margin 31.85%

Summary

Microsoft calendar Q2 2011 financial results should meet and exceed calendar Q1 2011 in some areas. Q1 is generally the annual cyclical low for Microsoft and Q4 is the annual cyclical high. The question is, by how much? The analysts' average Earnings Per Share estimate for Q2 is $0.58, which is a -4.92% decrease from Q1 EPS of $0.61. This appears a conservative estimate, as Q2 can be a stronger quarter for Microsoft than Q1. Microsoft can beat a $0.58 EPS in Q2 2011. The analysts' average Total Revenues of $17.23B is reasonable. Microsoft should reach $17.5B+ in Total Revenues for Q2 2011. For Q2 2011, Microsoft should beat Q1 2011 on Total Revenues, Operating Income, Net Income, and Earnings per Share. Any misses will be a disappointment and ramp down expectations. Microsoft should be close to, but will not beat, Q1 2011 on already stellar Gross Profit Margin, Operating Income Margin, and Net Income Margin. Any beat on margins would be exemplary. The detailed quarter by quarter charts are on the Microsoft Financial Performance page.

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