Microsoft’s cloud business drove 13% revenue growth in the fourth quarter of its 2017 fiscal year, while the company’s earnings topped Wall Street targets thanks in large part to a hefty tax writeoff from its mostly-shuttered phone business.
Shares of Microsoft were up over 1% at about $US75 per share in after hours trading on Thursday.
- Earnings per share of $US0.98 adjusted versus $US0.71 expected
- Revenue of $US24.7 billion adjusted, versus $US24.3 billion expected
Notably, a full $US0.23 of EPS came from a tax writeoff related the gradual wind-down of its smartphone business. That helps explain the much higher earnings than Wall Street had originally forecasted.
Revenue from Microsoft’s all-important cloud computing businesses were $US7.43 billion, an 11% increase over the same period in 2016. With Wall Street looking for strong cloud growth, that’s a positive sign. The Microsoft Azure cloud computing platform and Windows Server software are key parts of this cloud business, dubbed Intelligent Cloud by Microsoft.
Microsoft’s Office productivity software, which is encompassed under the Productivty and Business Processes umbrella, also saw a big uptick of 21% to $US8.4 billion over the same period. That includes traditional boxed Office software, as well as the Office 365 cloud productivity suite. There are now 27 million Office 365 subscribers.
Finally, the More Personal Computing segment, which includes Windows, Xbox, Surface, and Microsoft’s struggling phone business, shrunk 2% to $US8.8 billion. Microsoft attributes the dip to the continued drag from its smartphone business.
Also of note is that Surface revenue dropped 2% on its own from the year-ago period, which Microsoft attributes to the transition from the Surface Pro 4 to the newer, numberless Surface Pro, and the introduction of the new Surface Laptop.
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