Microsoft Crosses $80 On Top- And Bottom-Line Q1 Beat

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Office commercial products and cloud services grew by 10% (10% in CC), including an increase for Office 365 commercial by 42% (42% in CC), and a 17% (17% in CC) decline in Office commercial products.

"Our strong start to the fiscal year reflects the impact of our continued investment in product innovation and sales capacity to capture expanding market opportunities", said Amy Hood, executive vice president and chief financial officer at Microsoft.

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.

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Despite doom and gloom about its platforms, Microsoft had no problem impressing investors and analysts this quarter, generating earnings of $0.84 per share, well beyond the $0.72 per share analysts were expecting. Azure margins were also helped by developments in the core hardware and software, she said. But the big number as always was Azure revenue, which grew 90 percent. Xbox software and services jumped up 21 percent overall to make up for losses in hardware sales.

Microsoft ended the quarter with 28 million Office 365 consumer subscribers, up from 27 million from the previous quarter.

Windows consumer revenue increased by 4 percent, which is ahead of the overall personal computer market. After a decrease last quarter, Surface revenue actually increased by 12 percent year-over-year this time around, which is probably in large part due to the newly released Surface Laptop and Surface Pro. Both devices went on sale June 15. Windows OEM revenue went up by just four percent and commercial Windows and cloud services increased by seven percent. Industrywide, global PC shipments fell 3.6 percent in the period, according to Gartner Inc. This report is for the first quarter of its 2018 fiscal year, or the third quarter of the 2017 calendar year. The KeyBanc analysts had expected $1.64 billion in gaming revenue, which would have been down 13 percent. Analysts had estimated $8 billion.