- Microsoft announced earnings for the third quarter of its 2019 fiscal year on Wednesday, easily beating Wall Street estimates on the top and bottom lines.
- Microsoft reported revenue of $US30.6 billion, up 14% from the same period last year, and earnings of $US1.14 per share.
- Microsoft’s strong results were bolstered by continued growth in its cloud-computing services – and a solid boost to its Windows businesses, too.
- The results made Microsoft the third-ever trillion-dollar company in after-hours earning, following in the wake of Apple and Amazon.
- Watch Microsoft trade live.
Microsoft’s cloud just keeps growing, and Wall Street is eating it up. The 44-year-old tech titan boosted its revenue by 14% in the first three months of the year, sending its shares jumping up some 4% in after-hours trading, bolstered by the continued rise of newer products such as Microsoft Azure and Office 365.
The stock gains were enough to briefly value Microsoft at over $US1 trillion in after-hours trading, making it only the third company to hit that mark, behind Apple and Amazon. Should the stock pick up more steam overnight, it’s very possible that Microsoft could open trading on Thursday at or above $US1 trillion in value.
It’s a major milestone for Microsoft, which has radically reinvented itself in the five years since CEO Satya Nadella took the reins.
Here’s what Microsoft reported:
- Revenue: $US30.6 billion versus the $US29.86 billion expected by Wall Street analysts – up 14% from the same period last year.
- Earnings per share (GAAP): $US1.14 per share versus $US1 expected.
- Net income of $US8.8 billion, up 19% from the same period last year.
As ever, Wall Street was looking for strong growth in Microsoft’s cloud businesses, including the Microsoft Azure cloud-computing platform and the Office 365 productivity suite. These cloud products have become vital to Microsoft’s business as the market for Windows PCs continues to shrink.
The good news for Microsoft is that the company delivered: Its commercial cloud revenue, which includes products from across its business lines, accounted for $US9.6 billion in revenue for the quarter, the company said. That’s up 41% from the same period last year.
Microsoft’s intelligent-cloud unit posted the biggest growth of the quarter, up some 22% from the same period of 2018 for total revenues of $US9.7 billion. While Microsoft doesn’t disclose specific revenue for the Microsoft Azure cloud platform, it said that the business was up 73% from the same period last year.
In second place was productivity and business processes, which booked revenue of $US10.2 billion, up 14% year-over-year. Of special note within this business unit: Microsoft Office 365 commercial revenue saw growth of 30% from the same period of 2018, while the number of consumer Office 365 subscribers ballooned to 34.2 million.
Finally, more personal computing, which includes its Windows, Xbox, and Surface businesses, was up a solid 8% over the same period for $US10.7 billion in revenue total.
That includes a surprising 9% boost to its Windows OEM revenue from the same period of 2018, and a 19% gain in revenue for Windows commercial products over the same period. Microsoft attributes this boost to the increased availability in the quarter of high-end Intel processors for Windows PCs, following a shortage. Revenue for Microsoft’s Surface computers jumped 21% from the same period of last year, too, Microsoft reported.
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