Microsoft revenue and earnings beat expectations

Audrey Hill
April 27, 2018

Microsoft (MSFT) this afternoon reportedfiscal Q3 revenue and profit that comfortably surpassed expectations, although its shares sagged in late trading.

Earnings per share of $0.95 were up 36 per cent from the year-ago quarter and ahead of the $0.85 estimate given by analysts. Overall, Productivity and Business Processes accounted for $9 billion in revenue, a 17% (14% CC) increase year-over-year.

In addition, Windows commercial products and cloud services revenue increased 21% (up 17% in constant currency) driven by an increased volume of multi-year agreements and the mix of products that carry higher in-quarter revenue recognition.

"We delivered double-digit revenue and operating income growth driven by 58% growth in our commercial cloud revenue".

“With consistent investment and strong sales execution, this quarter we achieved better than expected performance across all segments, ” said Amy Hood, executive vice president and chief financial officer at Microsoft.

Office 365 productivity software, Azure cloud infrastructure services and LinkedIn professional networking services are among the company's growth engines. Azure had posted an over 90% growth for the past 10 quarters.

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In terms of guidance, analysts are expecting Microsoft to forecast $28.01 billion in revenue for its fiscal fourth quarter, according to Thomson Reuters.

Finally, More Personal Computing accounted for $9.9 billion in revenue, a 13% (11% CC) increase YoY. Xbox gaming revenue grew by 24% thanks to third-party games titles.

Microsoft shares are down $2.26, or 2.16%, at $92.00, in after-hours trading.

Much of Microsoft's recent growth has been fueled by its cloud computing business as more enterprises seek to cut data storage costs by adopting cloud-based software and moving their applications to data centers.

Microsoft shares, which are up nearly 40 per cent over the past year, rose slightly after closing 2.1 per cent higher at US$94.26.

Other reports by MaliBehiribAe

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