Could Microsoft Earnings Have Been Better?

by Fredrick Graves April 27, 2018, 5:15
Could Microsoft Earnings Have Been Better?

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

Revenue for Microsoft's More Personal Computing unit rose 13 per cent to US$9.9 billion, including a 32 per cent increase for its Surface business.

Revenue: $26.82 billion, vs. $25.77 billion as expected by analysts, according to Thomson Reuters. Microsoft does not announce specific Azure revenue numbers.

Operating income was $8.3 billion and increased 23%. "We are innovating across key growth categories of infrastructure, AI, productivity and business applications".

Windows commercial products and cloud services increased by 21% (17% CC), and that's from a greater volume of products that "carry higher in-quarter revenue recognition".

Amazon is raising the price of annual Prime subscription membership
Amazon .com has reported massive first quarter growth but there is no mention of how their Australian operation is performing. Facebook announced its results yesterday, delivering revenue of almost $12bn, up 49 per cent on the same quarter past year .

With consistent investment and strong sales execution, this quarter we achieved better than expected performance across all segments. The company now claims 30.6 million subscribers to its Office 365 Consumer subscription base. For the full fiscal year ending in June 2018, EPS is forecast at $3.65 on revenues of $107.29 billion.

Revenue was up more than 15 percent from the same period past year, and profit increased 35 percent.

Microsoft's Productivity and Business group, which sells the Office productivity suite of Word and Excel, the online version, Office 365, and other things, saw revenue rise 17% to $9 billion.

Despite the earnings beat, shares of the company stock fell 1% in after hours trading on the Nasdaq stock exchange. Credit Suisse's Michael Nemeroff and RBC Capital's Ross Macmillan expect that the business grew 93% in the March quarter, while Morgan Stanley's Keith Weiss is forecasting for the firm to post a 97% surge. Xbox gaming revenue grew by 24% thanks to third-party games titles.

Microsoft saw its stock fall as much as 2.5 percent last night despite a positive result.

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