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Microsoft Shares Up on Q4 Earnings Beat

Microsoft shares were up more than 3% in after-hours trading Tuesday on a fourth quarter earnings report that beat analyst estimates on earnings per share and revenues.

Microsoft reported earnings per share of 69 cents, beating analyst estimates of 58 cents per share, and revenues of $22.6 billion, compared to estimates of $22.15 billion. For Microsoft's full fiscal year, which ended June 30, the company reported revenues of $92 billion and earnings per share of $2.79.

"The Microsoft Cloud is seeing significant customer momentum and we're well positioned to reach new opportunities in the year ahead," said Microsoft CEO Satya Nadella in a statement.

For Microsoft's three broad business units, based on non-GAAP accounting, Productivity and Business Processes was up 5% to $7 billion, Intelligent Cloud was up 7% to $6.7 billion, and More Personal Computing was down 4% to $8.9 billion.

The headline cloud revenue figure for the quarter was 102% growth in Azure revenue, with Azure compute usage also doubling. Office 365 commercial cloud revenue was up 54%, while Microsoft now claims 23.1 million Office 365 consumer subscribers. Microsoft also reported that Dynamics CRM Online paid seats were up more than 2.5 times year-over-year.

Pushing the Enterprise Mobility Suite (which was recently renamed to Enterprise Mobility + Security) appears to have paid off, with customers nearly doubling year-over-year to 33,000 and a nearly 2.5x increase in the installed base.

While Surface revenues, including the Surface Book, were up by 9%, the biggest drop disclosure came in phone revenue, which fell by 71%. In a year in which Microsoft gave away free upgrades to Windows 10, Microsoft reported Windows OEM non-Pro revenue grew 27% and Windows OEM Pro revenue grew 2%.

In a statement, CFO Amy Hood credited the internal sales teams and partners for a strong finish to the fiscal year.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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