Investors will once again zero in on Microsoft's cloud business when dissecting the tech giant's latest earnings report, but they will also keep an eye out for two other factors: PC sales and expenses.
The company is scheduled to report fiscal second-quarter results after the bell Thursday, with Wall Street expecting earnings per share of 71 cents on revenue of $25.263 billion, according to a Thompson Reuters consensus estimate.
Last quarter, the company beat estimates on both lines, posting earnings per share of 67 cents on revenue of $21.66 billion.
Microsoft has been transitioning from a primarily PC-based company into a cloud-based one, incorporating products such as Azure and Office 365 into its commercial and enterprise business.
PC sales have been slipping across the board for years, and global personal computer shipments fell 10.6 percent in the quarter year over year, according to research firm IDC. Gartner, another research firm, put the decline at 8.3 percent.
Katherine Egbert, senior research analyst at Piper Jaffray, said in a Jan. 15 note the weak PC sales number led to her trim her revenue forecast. She also cited a "faster-than-expected deceleration in global PC shipments" as a risk.
But she also said Microsoft's cloud business, the world's second largest after Amazon Web Services, could offset PC weakness.