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Shares of Microsoft (MSFT - Free Report) opened higher on Friday one day after the company posted quarterly earnings results that topped expectations. Now, as investors begin to assess Microsoft’s financial report in greater detail, let’s look at how one of its legacy businesses is still thriving while the company dives further into new growth areas.
Microsoft’s adjusted quarterly earnings surged 36% from the year-ago period to hit $0.95 per share, which handily topped our Zacks Consensus Estimate of $0.85 per share. Meanwhile, the company’s overall revenues also beat our estimate and popped 16% to reach $26.82 billion.
Some of this growth can be attributed to the tech powerhouse’s effort to expand its offerings as the personal computer and related software industry slips. “Our results this quarter reflect the trust people and organizations are placing in the Microsoft Cloud,” CEO Satya Nadella said in the company’s quarterly earnings statement.
“We are innovating across key growth categories of infrastructure, AI, productivity, and business applications to deliver differentiated value to customers.”
Microsoft’s push into artificial intelligence and other new tech spaces will help the firm compete against fellow industry giants such as Amazon (AMZN - Free Report) , Oracle (ORCL - Free Report) , and Alphabet (GOOGL - Free Report) going forward. But while Microsoft’s Intelligent Cloud business impressed, Microsoft Office continued to prove its worth.
Productivity and Business Processes
Microsoft’s Productivity and Business Processes unit contains Office products, cloud services, LinkedIn, as well as its Dynamics CRM businesses. The company reported overall Productivity and Business Processes revenues of $9.01 billion. This marked a 17% climb and also topped our exclusive non-financial metrics consensus estimate of $8.76 billion.
Breaking the Productivity and Business Processesbusiness unit down further, Office commercial products and cloud services revenue increased by 14%. One of Microsoft’s most notable acquisitions in recent years, LinkedIn, saw its revenue surge 37%.
Two of the top three individual businesses that saw the biggest growth were Office 365 commercial and Dynamics 365. Office 365 revenue, which is made up of widely popular Word, Excel, PowerPoint, and other applications, soared 42%—the third largest individual climb.
Microsoft’s growing cloud-based CRM and ERP segment, Dynamics 365, was the second biggest mover, with revenues skyrocketing 65%. Clearly, investors should be pleased to see that the company has been able to expand the Productivity and Business Processes unit, while newer segments, such as Intelligent Cloud continue to climb.
With that said, Intelligent Cloud’s Azure segment was the biggest individual climber, posting 93% growth. Investors should also note that Microsoft’s two other key business units, Intelligent Cloud and More Personal Computing, both topped our NFM consensus estimates.
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Image: Bigstock
Microsoft Office Still Driving Huge Growth
Shares of Microsoft (MSFT - Free Report) opened higher on Friday one day after the company posted quarterly earnings results that topped expectations. Now, as investors begin to assess Microsoft’s financial report in greater detail, let’s look at how one of its legacy businesses is still thriving while the company dives further into new growth areas.
Microsoft’s adjusted quarterly earnings surged 36% from the year-ago period to hit $0.95 per share, which handily topped our Zacks Consensus Estimate of $0.85 per share. Meanwhile, the company’s overall revenues also beat our estimate and popped 16% to reach $26.82 billion.
Some of this growth can be attributed to the tech powerhouse’s effort to expand its offerings as the personal computer and related software industry slips. “Our results this quarter reflect the trust people and organizations are placing in the Microsoft Cloud,” CEO Satya Nadella said in the company’s quarterly earnings statement.
“We are innovating across key growth categories of infrastructure, AI, productivity, and business applications to deliver differentiated value to customers.”
Microsoft’s push into artificial intelligence and other new tech spaces will help the firm compete against fellow industry giants such as Amazon (AMZN - Free Report) , Oracle (ORCL - Free Report) , and Alphabet (GOOGL - Free Report) going forward. But while Microsoft’s Intelligent Cloud business impressed, Microsoft Office continued to prove its worth.
Productivity and Business Processes
Microsoft’s Productivity and Business Processes unit contains Office products, cloud services, LinkedIn, as well as its Dynamics CRM businesses. The company reported overall Productivity and Business Processes revenues of $9.01 billion. This marked a 17% climb and also topped our exclusive non-financial metrics consensus estimate of $8.76 billion.
Breaking the Productivity and Business Processesbusiness unit down further, Office commercial products and cloud services revenue increased by 14%. One of Microsoft’s most notable acquisitions in recent years, LinkedIn, saw its revenue surge 37%.
Two of the top three individual businesses that saw the biggest growth were Office 365 commercial and Dynamics 365. Office 365 revenue, which is made up of widely popular Word, Excel, PowerPoint, and other applications, soared 42%—the third largest individual climb.
Microsoft’s growing cloud-based CRM and ERP segment, Dynamics 365, was the second biggest mover, with revenues skyrocketing 65%. Clearly, investors should be pleased to see that the company has been able to expand the Productivity and Business Processes unit, while newer segments, such as Intelligent Cloud continue to climb.
With that said, Intelligent Cloud’s Azure segment was the biggest individual climber, posting 93% growth. Investors should also note that Microsoft’s two other key business units, Intelligent Cloud and More Personal Computing, both topped our NFM consensus estimates.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>