Microsoft Smashes on Earnings and Guidance

Tech giant Microsoft reported fiscal fourth quarter earnings on Thursday that beat on both the top and bottom line.

Shares of the stock went higher by 2% after the better than expected results were digested by Wall Street.
For the quarter, Microsoft reported earnings per share of $1.37 excluding certain items. This is in comparison to the $1.21 a share that analysts had been expecting, according to Refinitiv.

Revenue at $33.72 billion was also better than the $32.77 billion that was expected by analysts.

On an annualized basis revenue grew 12% in the fourth quarter of Microsoft’s 2019 fiscal year, which ended on June 30, according to the company’s statement.

This is now the ninth straight quarter of double-digit annualized revenue growth, according to FactSet.

The company’s Intelligent Cloud business segment, which includes the Azure public cloud, Windows Server, SQL Server, Visual Studio, GitHub and consulting services, produced $11.39 billion in revenue in the quarter. Analysts polled by FactSet were waiting for $11.02 billion.

Azure growth slowed to 64%, representing the slowest growth rate in at least four years.

“Our partner conversations this quarter continued to emphasize Azure’s momentum, which are enabling the company to significantly outpace the overall market’s growth as they see Azure contract commitments seeing significant uplift in terms of contract value and duration,” Goldman Sachs analysts led by Heather Bellini, wrote. The firm has a “buy” rating on the stock.

Microsoft’s CFO Amy Hood, said on a conference call with analysts that the company expects to achieve between $31.7 billion and $32.4 billion in revenue across its three business segments in the fiscal first quarter.
Hood said that cost of goods for the fiscal first quarter would be between $10.55 billion and $10.75 billion. This is below the FactSet consensus estimate of $10.95 billion.

So far this year, shares of Microsoft have climbed 34%.

Disclaimer: We have no position in Microsoft Corporation (NASDAQ: MSFT) and have not been compensated for this article.