Analysts surveyed by Thomson Reuters had expected Microsoft to report adjusted earnings per share of 58 cents and sales of $22.1 billion. In short, the company beat expectations.
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After Microsoft reported its earnings results, shares climbed during the afterhours trading moving up 4.2 percent to $55.34.
For its fiscal third quarter, Microsoft earnings came to 69 cents a share.
Microsoft continues to see businesses moving to the cloud and subscription-based software and services, Chief Financial Officer Amy Hood said via telephone. “The Microsoft Cloud is seeing significant customer momentum, and we’re well positioned to reach new opportunities in the year ahead”, said Nadella in a statement. Here is the breakdown.
Office 365 commercial revenue grew 54 percent in the quarter. He says that usage also climbed for Office 365 and consumer products as well.
The company’s “Intelligent Cloud” operations also grew, driven by revenue growth from Azure, Microsoft’s platform for business cloud computing. “We saw it more specifically in more developed markets”.
The Productivity and Business Processes segment, which includes Microsoft’s Office franchise as well as its Dynamics business products, posted a sales gain of 4.6% to $6.97 billion. The company’s Intelligent Cloud segment, which includes its Azure on-demand computing services, rose 6.6% to $6.71 billion.
Enterprise Mobility customers almost doubled year-over-year to over 33,000, and the installed base grew almost 250 percent year-over-year. Analysts had projected $6.64 billion.
As for Surface devices? Surface revenue increased 9 percent over the same period past year, and Xbox Live usage was up 33 percent. Microsoft attributes this to more premium devices being sold, which they get more revenue from than, for instance, a $199 HP Stream where Windows is no-cost.
While phones were a sore spot, revenue from both Surface and Xbox were up.
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Microsoft’s commercial cloud business is on a $12.1 billion run rate delivering 42 percent margins, Nadella said. For XBox Live, monthly active users grew 33 percent year-over-year to reach 49 million. The news surprised investors in view of the Nokia cellphone disaster and loss of revenue for the Windows 10. For 1QFY16, UAL reported sales of $8.2 billion, while for the same quarter previous year, the company reported $9.9 billion in sales.
