After last quarter’s surprise blowout, all nervous eyes are on Thursday’s Microsoft earnings. Can the House That Gates Built do it again? And is this the perfect defensive play in a slowing economy?
CNBC’s Jim Goldman broke down the earnings expectations. The Street is calling for a very strong performance but the real focus is, as always, on guidance.
Particularly, analysts and investors will be looking to see if Microsoft can provide an outlook for its enterprise business – that is, the majority of its sales that come from big business and not the consumer. That insight will ultimately help determine what the global tech upgrade cycle is and could be a watershed report for the rest of the tech sector.
It’s easy to view Microsoft as a manifestation of Vista or X-Box sales but its consumer business is only 12% of the whole pie. Jeff Macke called it the “gravy on top” of the turkey dinner that is the company’s enterprise side. Regardless of what it does to its numbers, Jeff would buy MSFT as the ultimate defensive play when everything else is just too dicey.
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Trader disclosure: On Jan 23, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (YHOO); Najarian Owns (BIIB), (C), (CSCO), (EBAY), (MCD), (MSFT); Najarian Owns (AAPL) Calls, (COP) Calls, (NSC) Calls, (WM) Calls, (YHOO) Calls, (YRCW) Calls; Finerman Owns (GS), (M); Finerman's Firm Owns (MO), (ODP), (TSO), (YHOO), (AEO), (CROX), (HD), (WMT); Finerman's Firm And Finerman Own (FLS); Finerman's Firm Is Short (SPY), (MDY), (IJR), (IWM), (SPG); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts