Microsoft Corporation FQ1 2018 Earnings Boosts Shares

Microsoft Corporation FQ1 2018 Earnings Boosts Shares

Microsoft Corporation FQ1 2018 Earnings Boosts Shares

Microsoft today announced its quarterly earnings for its first financial quarter of 2018 (yes, I know it's early, but that's how Microsoft's financial quarters work).

Revenue from Azure, which competes with Inc's Amazon Web Services and offerings from Alphabet Inc's Google, IBM and Oracle Corp, grew 90 percent compared to a 97 percent growth rate in the preceding quarter.

Microsoft Corp. beat earnings expectations in sales for its first fiscal quarter, thanks in no small part to meeting its own self-imposed goal of reaching $20 billion in annual cloud revenue. This report is for the first quarter of its 2018 fiscal year, or the third quarter of the 2017 calendar year. In the just-completed quarter, that business met and exceeded the company's goal of $20 billion in annualized revenue. Windows OEM revenue was up 4 percent while Windows comercial revenue increased 7 percent.

Microsoft's cloud business - which includes products such as Office 365, Dynamic 365 and the flagship Azure computing platform - is a major growth driver. Although enterprise services revenue increased by 1 percent with growth in Premier Support Services offset by declines in custom support agreements.

Azure's strong performance helped lift the gross margin at Microsoft's cloud business to 57 percent, said Stephanie Rodriguez, director of investor relations for Microsoft. The business of licensing Windows out to PC manufacturers was up 4%.

Surface revenue finally saw some growth, as it had been declining for a while due to the lack of new hardware.

Intelligent Cloud: $6.9B in revenue (+13% in constant currency).

In terms of guidance, analysts are looking for Microsoft to hit 83 cents in earnings per share, excluding certain items, and $28.15 billion in revenue in the second quarter, which will end on December 31, according to Thomson Reuters.

Shares of the world's largest software company rose 3.1 percent to $81.20 in trading after the bell.

Surface revenue by itself was up 12% from a year ago, which is good news for Microsoft following a dip in the previous quarter.

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