Microsoft hits an all-time high after crushing earnings


Microsoft hit an all-time high of above $US108 a share early Friday after crushing fourth-quarter earnings. It’s currently trading up 3% at $US107.52.

The software giant beat on both the top and bottom lines, earnings $US1.14 per share on revenue of $US30.1 billion. Wall Street analysts surveyed by Bloomberg were expecting earnings of $US1.08 a share and revenue of $US29.2 billion.

“We had an incredible year, surpassing $US100 billion in revenue as a result of our teams’ relentless focus on customer success and the trust customers are placing in Microsoft,” Microsoft CEO Satya Nadella said in the earnings press release.

Investors were eager to see the company’s cloud business results, which had already seen explosive growth this year. The company said commercial cloud revenue grew 53% year-over-year while Azure revenue grew at 89% YoY clip.

CFO Amy Hood emphasised, “Exceptional sales execution delivered double-digit revenue growth across all segments and strong progress against our strategic priorities, anchored by commercial cloud revenue.”

Guidance was also a big catalyst to Friday’s gains. Microsoft said it sees revenue of between $US27.35 billion and $US28.o5 billion in the first quarter, compared to Wall Street estimate of $US27.4 billion.

RBC Capital Markets analyst Ross Macmillan raised his price target from $US115 a share to $US128. “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 was up nearly 22% this year through Thursday.

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