Microsoft Corporation, the world's largest software company, is slated to post quarterly earnings after U.S. markets close on Thursday. Analysts will be eyeing the results to see how newly crowned CEO Satya Nadella’s strategy and leadership is impacting the company’s bottom line.

“After a decade of pain with [Steve] Ballmer, Nadella has created a different, more innovative and focused company in Redmond -- a strategy so far investors have cheered,” said Daniel Ives, an analyst at FBR Capital Markets & Co.

This report will reflect Nadella’s second full quarter as CEO after taking over from Ballmer in February. Wall Street expects Microsoft to report a fiscal first-quarter profit of $4.08 billion, or 49 cents a share, excluding items, on revenue of $22.01 billion, according to analysts polled by Reuters.

Microsoft's new strategy has been focused on both cloud growth and mobile, as the cloud remains at the epicenter of Nadella's vision. “While he is helping shift Microsoft's strategy toward the cloud, mobile and subscription services, this transition will be not be an overnight success,” Ives said.

Investors are also looking to see more signs of success on the cloud this quarter with a better-than-expected PC market, possibly giving Microsoft some tailwinds as witnessed with Intel Corporation earning’s earlier this month. S&P Capital IQ reiterated its 12-month target price for Microsoft at $48 because the company has “benefited recently from a more constructive PC environment.”

But Microsoft is still facing headwinds following its recent acquisition of Nokia Devices and Services business this past spring.

“The biggest challenge for Microsoft is turning around the Nokia and mobile business in the right direction as this remains an overhang on the name and a barrier to penetrating the golden goose of consumer spending,” Ives said.

Nadella has been realigning the company’s structure and making reductions to simplify work and integrate the Nokia Devices and Services teams into Microsoft. Microsoft acquired substantially all the Finnish phone maker’s handset business in April for $7.2 billion, thereby increasing its employees by 25,000 for a total headcount of nearly 127,000.

As part of the Microsoft-Nokia deal, the software giant said it would also cut $600 million per year in costs within 18 months of closing the acquisition. Microsoft said over the summer it would cut up to 18,000 jobs over the next year, or about 14 percent of its workforce. Nearly two-thirds of the layoffs are expected to come from its phone and tablet staff. 

Microsoft is scheduled to host a conference call with shareholders at 5:30 p.m. EDT following the release of the company’s first-quarter earnings report after the closing bell.