Microsoft Corporation (NASDAQ: MSFT) has reported the adjusted earnings per share of 83 cents in the second quarter of 2016, above the analysts’ estimates of 79 cents. As a result, the stock opened gap up and generated over 2% on January 27th, 2017 (as of 10:51AM EST; Source: Google finance)
Microsoft has reported the second-quarter adjusted revenue of $26.07 billion, which is above than the $25.3 billion expectations. MSFT has posted earnings per share of 78 cents on a non-GAAP basis and $23.8 billion in sales in the second quarter last year. The growth came due to rising customer sign-ups for its cloud offerings like Azure, as the revenue almost doubled. MSFT had acquired LinkedIn which contributed $228 million of revenue in the second quarter but reported a net loss of $100 million, or one cent per share.
In addition to the great demand for Azure, the consumers and corporations continued to purchase Office 365, a cloud-based version of the company’s productivity software that includes Word and Excel. Almost 25 million consumers are now subscribed to Office 365, and sales have increased 47 percent in the fiscal second quarter. The Azure platform has competition with cloud infrastructure offerings from market leader Amazon.com Inc, Alphabet Inc’s Google, IBM and Oracle Corp. Further, the commercial cloud business has posted the gross margin of 48 cents, down on the sequential basis of 49 cents but up from 46 percent a year ago.
The Productivity and Business Processes revenue grew 10 percent to $7.4 billion, and the Intelligent Cloud revenues grew 8 percent to $6.9 billion. However, the more Personal Computing revenues declined 5 percent to $11.8 billion, slightly beating the rate at which personal computer sales fell in the quarter. The Intelligent Cloud business has beaten analysts’ average estimate of $6.73 billion. Microsoft’s estimates for next quarter were $6.45 billion to $6.65 billion, only slightly higher than FactSet’s $6.61 billion estimates.
MSFT has pledged to reach annualized revenue of $20 billion in its corporate cloud business by the fiscal year that ends in June 2018. The corporate cloud business revenue stood at more than $14 billion at the end of the second quarter. Additionally, MSFT has been spending on data centers and adding products to win new cloud customers.
MSFT stock has risen over 28% in the last one year (source: Google Finance) and currently hovering near their 52 week high prices.