Microsoft (MSFT) Earnings Preview: Tablet Woes Front And Center As Investors Fret About About Revenue Trend At Apple Competitor

Earnings for Microsoft Corp. (NYSE:MSFT), the world's largest software company, are expected to remain flat in the company's fiscal first quarter of 2014 with estimates close to what was reported in the first quarter of last year as hardware sales have been sluggish.

Analysts have dropped Microsoft’s estimates significantly following misses in revenue reports for all four of the previous fiscal quarters. During the upcoming conference call, Microsoft now has to prove that sales of its tablets are improving, analysts suggested.

The company took a $900 million write-down related to Microsoft's Surface RT tablet, which had its price slashed by $150 in the fourth quarter. Microsoft also recently introduced its Surface 2 and Surface Pro 2 tablets as well as its Windows 8.1 operating system, expected to be closely watched by investors in the upcoming quarter.

Analysts polled by Thomson Reuters expect the Redmond, Wash.-based company to report on Thursday a $17.80 billion, or 54 cents a share profit, compared to $16.01 billion, or 53 cents per share profit a year ago..

Microsoft will also be reporting information about its recent 28 cents per share dividend increase as well as its new repurchase program, which was established to replace the previous $40 billion share repurchase program that was set to expire Sept. 30, 2013.

Microsoft CEO Steve Ballmer also notably announced his impending resignation in August, and there is lots of talk about how new leadership could help the company. However, an announcement of his replacement is not expected in the upcoming first quarter conference call.

Microsoft is currently trading at around $34.99 a share while its stock has increased 29.9 percent so far this year.