Microsoft (MSFT) Earnings Report Out Today, CNBC's 'Fast Money' Panel Weighs In
NEW YORK (TheStreet) --Shares of Microsoft Corp. (MSFT) - Get Report are lower by 1.3% to $53.27 on Tuesday afternoon, as the company is set to report earnings for the second quarter today after the bell.
CNBC's "Fast Money Halftime Report" panel discussed their expectations for the report, and the company's outlook beyond today's numbers.
Kevin O'Leary of O'Shares Investment and CNBC''s "Shark Tank" thinks the company is going to deliver for the quarter based on current trends he's been noticing within his own portfolio.
"I'll tell you what I find so fascinating, I've got so many portfolios with companies with small market caps, and about 70% are now using Microsoft products to run their business," O'Leary said citing the switch from Apple (AAPL) products to those of Microsoft.
Moreover, "Microsoft has nailed it terms of how they have iterated these products for small business. I think they've come back and I think they're going to continue to grow" O'Leary said, citing a new management team, the balance sheet, and increases on dividends. All things that make him "optimistic on this quarter."
Sarat Sethi, managing director and portfolio manager at Douglas C. Lane & Associates, even more bullish on the stock, says regardless of today's report he stands by the company, going so far as to say that even if the report's numbers came in lower than expected, he'd just buy more.
"I want to own this company for the next three to five years. Recurring revenue, growing margins, great cash flow, buying back shares, and increased dividend. What else do you want," Sethi said.
Finally, in terms of more cautious outlook to this afternoon's report, Stephanie Link, managing director and portfolio manager at TIAA Global Asset Management, says there are concerns.
"What I'm concerned about is not so much this quarter, because I think they set the bar low last quarter in terms of guidance, so I think they will be fine, but guidance going forward could be a little disappointing," Link said.
"Gross margins have been under pressure, because they're investing so much, so it makes sense and the growth is there but you have to have profitable growth," Link noted, before saying that she does, however, remain optimistic on the company's long-term outlook.
Separately, TheStreet Ratings rates Microsoft as a "Buy" with a ratings score of "B+." This is driven by several positive factors, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover.
The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. TheStreet Ratings feels its strengths outweigh the fact that the company has had sub par growth in net income.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: MSFT