Microsoft Tests Its Mettle

SAN FRANCISCO -- Conservative expectations surround Microsoft(MSFT Quote) for its first fiscal quarter, making it possible for the company to narrowly beat the Street when it reports earnings Thursday.

But with tech stocks seemingly headed toward another multi-year low, the optimism might end there.

Fort Pitt Capital analyst Kim Caughey expects the company to meet or beat analysts' profit estimates of 47 cents a share by one or two cents. Fort Pitt owns 407,000 shares, and Caughey holds Microsoft shares personally.

But she'll be looking even more closely at Microsoft's comments about its server and tools group, which "is a great indicator of whether a wide swath of businesses are still buying software," she says. ...