Microsoft Crushes Sales Forecasts, Retains Most Valuable Status
Microsoft's (MSFT) stocks rose more than 3% in early trading last Friday, beating Wall Street estimates and analysis for the fiscal fourth-quarter earnings. These gains marked a definite high for the stock, according to Markets Insider, who followed the stock story of the software manufacturer.
The company announced its earnings that were priced $1.37 a share, beating modest estimates of $1.21. Revenue was priced at $33.72 billion, topping estimates priced around $32.77.
This jump in shares further solidified the software company's status as the world's most valuable, with their market cap set at $1.05 trillion as of Thursday's close.
One of the highlights of Microsoft's stock blitz was cloud revenue. The figures showed a rise of 19%, with the company's "Azure" platform growing by 64% during the same period in 2018. The company showed a 14% growth in the productivity and business processes sector, the same sector of the company which produces software like Office 365 and maintains LinkedIn and Dynamics.
A segment that didn't do well was the gaming business. Revenue was down 10% in the quarter due to stiff competition in the sector. The company's Xbox line is still hopeful that the next console, labeled "Project Scarlett" and set to launch in holiday 2020, will lift it up.
The cloud-computing sector had been a big contributor to Microsoft's strong stocks performance, extending it under the leadership of chief executive Satya Nadella. According to the Wall Street Journal, the results reflected their strong focus on cloud services, which had been big in revolutionizing business computing over the past ten years.
Companies have been paying big for subscriptions and renting computer power as opposed to maintaining their own servers and buying applications to do it.
Their strong revenue shows how Microsoft continues to demonstrate their strategy as a "clear winner" in the digital transformation trend, which companies are now trying to take part in. Brad Reback, an analyst at Stifel, Nicolaus & Co., shared this observation, also adding that the company has remained a "vendor of choice."
As for any signs of this surge weakening, chief financial officer Amy Hood believed that it would continue to persist, saying that the current fiscal year could end up in a double-digit sales growth once again. Except for their gaming division, the shares of the software giant appears to be in good shape for the foreseeable future.