Microsoft (MSFT) Q2 2023 Earnings: What to Expect

Enterprise software and cloud giant Microsoft (MSFT) is scheduled to report second quarter fiscal 2023 earnings results after the closing bell Tuesday. The shares are down roughly 33% from their peak, and investors want to know whether now is an opportunity to jump in.

While the market remains broadly positive on Microsoft, the companys recent layoff announcement is the latest acknowledgment by the company that itsearnings are slowing down, and also, more broadly, that a recession may be imminent. On WednesdayMicrosoft saidit would reduce its global headcount by 10,000 employees and take a $1.2 billion charge related to the job cuts in its fiscal second quarter, impacting earnings by 12 cents per share.

"It's important to note that while we are eliminating roles in some areas, we will continue to hire in key strategic areas," said CEO Satya Nadella in a letter to employees. With concerns about rising inflation, rising interest ratesand slower tech spending, the software giant suffered an almost 30% decline in 2022. However, the companys fast-growing Azure cloud platform and the Intelligent Cloud business remains the cornerstones to the business and its long-term success. Azure and cloud services revenues are growing north of 40% year over year, while profit margin is close to 45%.