CEO Search, Nokia M&A Will Be Focus of Microsoft's (MSFT) Q2 Report - Analyst

FBR Capital keeps Microsoft (Nasdaq: MSFT) at Market Perform with a price target of $38 heading into the software giant's Q2 results.

Analyst Daniel H. Ives is looking for more color on Microsoft's CEO search when the company reports results, slated for January 23rd after markets close. Overall, key updates will be: (1) an update on the CEO search; (2) progress with the Nokia (NYSE: NOK) acquisition and overall mobile strategy; (3) new product initiatives on the Windows 8 front; and (4) management's view of the IT spending environment for 2014.

Ives sees a CEO decision happening within the next four weeks and would like to see an outsider assume the role given that Microsoft is in need to more innovative ideas. The analyst comments, Ultimately, we continue to believe Stephen Elop is positioned as the front runner in the CEO search (with Alan Mulally now out) given his previous Microsoft experience and demonstrable expertise in the mobile space, and as he has shown a willingness to make hard decisions, evidenced by the restructuring efforts (reduced head count, organizational changes, new partnerships) made while at Nokia. Two outside candidates include Facebook's (Nasdaq: FB) Sheryl Sandberg and VMWare's (NYSE: VMW) Pat Geisinger.

Ives sees positive momentum in Microsoft's cloud offerings, while PC headwinds remain a concern following recent IDC data.

For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.

Microsoft closed at $36.38 last Friday, with a 52 week range of $27.00 - $38.98.

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