Microsoft beats expectations yet again on the back of booming cloud business

By : |July 21, 2017 0

Microsoft beat expectations yet again posting much better profits in its fiscal fourth quarter than expected, thanks to strong Cloud performance. The Redmond-based company reported non-GAAP revenue of $24.7 billion and GAAP earnings per share of $0.83 (and non-GAAP earnings per share of $0.98) for the last three months. Operating income was $7.0 billion non-GAAP.

Wall Street had expected revenues of around $24.3 billion and $0.71 for earnings per share. With no surprises, the star performer this time too is Microsoft’s Azure cloud computing platform. The company’s Intelligent Cloud unit, which contains its Azure cloud platform and Windows Server product, saw sales jump 11 percent year-over-year to $7.4 billion, beating consensus estimates of $7.3 billion. Microsoft doesn’t break out results for its Azure cloud platform but noted that Azure revenues increased 97 percent year-over-year in the quarter.

“Innovation across our cloud platforms drove strong results this quarter,” said Satya Nadella, chief executive officer at Microsoft, in a statement. “Customers are looking to Microsoft and our thriving partner ecosystem to accelerate their own digital transformations and to unlock new opportunity in this era of intelligent cloud and intelligent edge.”


Revenue in Microsoft’s Productivity and Business Processes, which contains LinkedIn and its Office 365 software, spiked 21 percent year-over-year. LinkedIn revenue was $1.1 billion, which is higher than the $975 million it generated in the third quarter. Microsoft acquired LinkedIn for $26.2 billion in 2016.

The only lagging segment in the report was More Personal Computing segment that dropped by 2 percent. Phone revenue dropped by $361 million and Surface revenue went down 2 percent, but the division was buoyed by gains from Windows, games, and search ads.

In terms of guidance, excluding corporate and other revenue, Microsoft expects to post $23.6-24.3 billion in revenue in the first quarter of its 2018 fiscal year, which ends on September 30, chief financial officer Amy Hood said on the company’s earnings call.

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