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[video] Quick Take: Surface Key to Microsoft Results

NEW YORK ( TheStreet) -- Microsoft (MSFT) reports earnings after the close on Thursday. TheStreet's Brittany Umar and Stephanie Link, co-manager of the Action Alerts PLUS portfolio, highlight what to expect.

Link reiterated that Microsoft is looking to shift away from its dependency on PCs and to focus on newer, high-growth markets, such as cloud and mobile.

Because of this, the company's Surface 2 tablet results will be crucial, Link said. She added that the company recently wrote off $900 million worth of old tablet inventory, a sign that sales of the previous model didn't fare too well.

And while expectations are low, they may not be low enough. She suggested that perhaps the guidance would have to be cut one more time.

The transition into mobile, cloud and other business segments will be hard, especially since a new CEO has not been named.

Link said that perhaps the new CEO will set the bar very low, making it easier for the company to hit its goals and metrics. But a new CEO is unlikely to be named until 2014.

She cautioned investors not to rush into the stock, since it doesn't appear to have much upside near term.

On the bright side, though, Link admitted the downside should be limited, due to the company's strong cash flow and dividend yield.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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