LIVE: Here come Microsoft’s earnings (MSFT)October 27, 2019
- Microsoft beat analyst estimates in fiscal first-quarter earnings, reporting earnings of $1.38 per share on revenue of $33.1 billion.
- Microsoft’s closely watched Azure cloud computing business reported 59 percent revenue growth.
- Office 365 Commercial surpassed 200 million monthly active users.
- Despite strong results, Microsoft stock was down less than 1 percent to around $135 per share in after-hours trading immediately following the earnings release.
- Visit Business Insider’s homepage for more stories.
Microsoft reported fiscal first-quarter earnings after the market closed on Wednesday, once again beating Wall Street estimates propelled by growth in the Redmond-based company’s cloud computing business.
Microsoft stock was down less than 1 percent to around $135 per share in after hours trading immediately following the earnings release. The company’s shares in regular trading Wednesday closed up less than one percent to about $137 per share.
Here’s what the company reported:
- Revenue: $33.1 billion (compared to analyst’s estimates of $32.3 billion), up 14 percent compared to the same period last year.
- Earnings: $1.38 per share, versus Wall Street’s expected $1.24 per share.
- Profit: $10.7 billion, up from $8.82 billion in the same period last year.
Analysts closely watch Microsoft’s cloud computing business as the company attempts to close the gap with the dominant Amazon Web Services.
Microsoft’s overall commercial cloud business, in which it also counts Microsoft Azure, Office 365 and other cloud services, reached $11.6 billion in sales for the quarter, up 36 percent year over year. Microsoft said gross margins for the commercial cloud business increased to 66 percent, driven by a “material improvement” in Azure’s gross margin.
Microsoft Azure revenue grew 59 percent, but the company doesn’t report revenues figure specific to Azure.
Office 365 for business revenue grew 25 percent and surpassed 200 million monthly active users.
Productivity and Business Processes revenue – the business unit which includes Office products for businesses and customers, LinkedIn revenue and Dynamics products and cloud services – increased 13 percent to $11.1 billion.
Revenue for the division Microsoft calls “More Personal Computing,” including Windows, search, Xbox and Surface, was also $11.1 billion, up 4 percent from this time last year.
Microsoft said revenue generated from the business of selling Windows to PC manufacturers is up 9 percent from the year-ago period — likely because of the end-of-support for Windows 7 and the ensuing rush to Windows 10 for those who were still using it.
The company’s Intelligent Cloud business, which includes Azure, server products, enterprise and cloud services, brought in 10.8 billion in revenue, up 27 percent from the same quarter last year.