Cloud, PC Trends Positive — Microsoft Earnings Preview

Microsoft hits $100bn in revenue for the first time thanks to cloud, Surface growth

Microsoft earnings: Q4 FY2018

Microsoft returned $5.3 billion to shareholders in the form of dividends and share repurchases in the fourth quarter of fiscal year 2018, an increase of 16 per cent compared to the fourth quarter of fiscal year 2017. Microsoft reported that Office commercial products and cloud services revenue increased 10% (up 8% in constant currency) mainly driven by strong Office 365 commercial revenue growth of 38% (up 35% in constant currency). Let's dive in and examine how each performed. "Given the trend of accelerating cloud computing revenue growth (11%, 13%, 15% last 3Qs) we are raising our free-cash-flow multiple", he wrote in a note out to clients.

Microsoft's overall revenue for the fourth fiscal quarter reached $30.1 billion, up 17 percent YoY and beating analysts' predictions of $29.2 billion.

"The strength of our results reflects accelerating innovation and the trust customers are placing in us to power their digital transformation", Nadella said.

Microsoft had fired several thousand employees a year ago as it announced a huge do-over in its sales strategy.

"Our hybrid value proposition has continued to resonate, so there are a bunch of workloads that are migrating to the cloud", the Microsoft boss said. The company cited record levels of job postings and LinkedIn sessions, 41% gain over a year prior.

Microsoft hits $100bn in revenue for the first time thanks to cloud, Surface growth
Microsoft posts bumper Q4, with Windows, Surface, Azure all up

These results will surely make Microsoft happy, and it's now an $800 billion company. The devil is in the detail with this growth number as Microsoft states it occurred across Xbox One Windows 10 and mobile platforms signaling that perhaps more Windows 10 owners were signing up for Xbox Live than were people who owned Xbox One consoles. Windows OEM revenue is up 14% Y-o-Y and Windows Commercial did even better with 23% growth.

Intelligent Cloud revenues were $9.6bn, up 20 per cent. Server business revenues were up 24 per cent. With a revenue of $30.1 billion (up 17%), you wouldn't blame Microsoft's chief executive officer Satya Nadella for declaring it "an incredible year". Search revenue was up 17 percent, with, as ever, the twin factors of increased revenue per search and increased search volume to thank.

Stifel analyst Brad Reback summed it up nicely in terms of the overall picture now at Microsoft.

He increased his price target to $118 from $107 which is in line with the majority of other analysts response to the positive earnings beat.

Microsoft (msft) shares were up around 2.2% to $106.71 in midday trading on Friday, due in part to investor optimism over the company's push into cloud computing.

Finns protest Trump-Putin meeting
The US has imposed tariffs on steel and aluminum against the European Union and other allies, sparking retaliation. At the time, Flake tweeted that the indictments reaffirmed that Russian Federation interfered with the elections.

Modi gets surprise hug from Rahul Gandhi, South Asia News & Top Stories
The BJP and RSS have taught him what it means to be in the Congress, what Lord Shiva means and what being a Hindu means, he said. Launching a scathing attack on the BJP, Gandhi said that PM Modi ruled out of fear, and that fear had turned into anger now.

Hometown favorite Bryce Harper rallies to win HR Derby
He was nine shy of equalizing as he chatted with Nationals star Max Scherzer, the National League All-Star Game starting pitcher. The Hoskins bats include tributes to Philadelphia, with the Liberty Bell and the "215" on top of the Philly skyline.

Latest News