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Tickers in this Article: MSFT
Microsoft (Nasdaq:MSFT) will release its first quarter earnings on Thursday, October 18, 2012. Analysts have become increasingly bearish on the company over the last month, with the consensus analyst estimate slipping from 60 cents a share to the current prediction of earnings of 57 cents a share.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: 12 Things You Need To Know About Financial Statements

What to Expect: Whereas the consensus estimate was 67 cents three months ago, it has since fallen. For the fiscal year, analysts are projecting earnings of $3 per share.

Revenue for the quarter is expected to be $16.45 billion, short of last year's reported figure of $17.37 billion by 5.3%. Microsoft is expected to report revenue of $80.11 billion for the fiscal year.

Company Performance: Revenue has risen for four consecutive quarters now. It increased 4% to $18.06 billion in the fourth quarter of the last fiscal year. Prior to that, the figure rose 6% in the third quarter of the last fiscal year, 4.7% in the second quarter of the last fiscal year and 7.3% in the first quarter of the last fiscal year.

MSFT's P/E ratio of 14.6 is above the industry average of 0.43. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Can Investors Trust the P/E Ratio?

Since July 17, 2012, the stock price has fallen 1.6% to $29.20 from $29.66. Microsoft's stock price is on a downward streak. The share price has fallen 83 cents since October 4, 2012.

The Competition: Microsoft develops, licenses, and supports a range of software products and services for a variety of computing devices. Analysts are optimistic about Microsoft, with 20 of 30 assigning it a buy rating. This marks a small improvement, as the number of buy ratings has risen slightly over the past three months.

The company's closest competitor in the software and programming industry is Oracle (ORCL). Analysts are less optimistic about Microsoft than about Oracle. Twenty-two out of 35 analysts rate the latter a buy.

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