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Compared to Estimates, Microsoft (MSFT) Q3 Earnings: A Look at Key Metrics
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For the quarter ended March 2024, Microsoft (MSFT - Free Report) reported revenue of $61.86 billion, up 17% over the same period last year. EPS came in at $2.94, compared to $2.45 in the year-ago quarter.
The reported revenue represents a surprise of +2.02% over the Zacks Consensus Estimate of $60.63 billion. With the consensus EPS estimate being $2.81, the EPS surprise was +4.63%.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Microsoft performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Percentage Change in Revenue Y/Y: 17% versus the nine-analyst average estimate of 14.7%.
Productivity and Business Processes - Percentage Change in Revenue Y/Y: 12% versus the eight-analyst average estimate of 11.2%.
Intelligent Cloud - Percentage Change in Revenue Y/Y: 21% compared to the 18.6% average estimate based on eight analysts.
More Personal Computing - Percentage Change in Revenue Y/Y: 17% versus the eight-analyst average estimate of 12.5%.
Long-term unearned revenue: $2.95 billion compared to the $3.30 billion average estimate based on two analysts.
Short-term unearned revenue: $41.89 billion versus the two-analyst average estimate of $40.43 billion.
Revenue- Productivity and Business Processes: $19.57 billion versus the 11-analyst average estimate of $19.50 billion. The reported number represents a year-over-year change of +11.7%.
Revenue- Intelligent Cloud: $26.71 billion versus the 11-analyst average estimate of $26.22 billion. The reported number represents a year-over-year change of +21%.
Revenue- More Personal Computing: $15.58 billion versus $14.93 billion estimated by 11 analysts on average. Compared to the year-ago quarter, this number represents a +17.5% change.
Revenue- Product: $17.08 billion versus the two-analyst average estimate of $16.30 billion. The reported number represents a year-over-year change of +9.6%.
Revenue- Service and other: $44.78 billion versus $44.20 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +20.2% change.
Operating Income- Productivity and Business Processes: $10.14 billion versus $10.12 billion estimated by three analysts on average.
Shares of Microsoft have returned -2.9% over the past month versus the Zacks S&P 500 composite's -3% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.
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Compared to Estimates, Microsoft (MSFT) Q3 Earnings: A Look at Key Metrics
For the quarter ended March 2024, Microsoft (MSFT - Free Report) reported revenue of $61.86 billion, up 17% over the same period last year. EPS came in at $2.94, compared to $2.45 in the year-ago quarter.
The reported revenue represents a surprise of +2.02% over the Zacks Consensus Estimate of $60.63 billion. With the consensus EPS estimate being $2.81, the EPS surprise was +4.63%.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Microsoft performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
- Percentage Change in Revenue Y/Y: 17% versus the nine-analyst average estimate of 14.7%.
- Productivity and Business Processes - Percentage Change in Revenue Y/Y: 12% versus the eight-analyst average estimate of 11.2%.
- Intelligent Cloud - Percentage Change in Revenue Y/Y: 21% compared to the 18.6% average estimate based on eight analysts.
- More Personal Computing - Percentage Change in Revenue Y/Y: 17% versus the eight-analyst average estimate of 12.5%.
- Long-term unearned revenue: $2.95 billion compared to the $3.30 billion average estimate based on two analysts.
- Short-term unearned revenue: $41.89 billion versus the two-analyst average estimate of $40.43 billion.
- Revenue- Productivity and Business Processes: $19.57 billion versus the 11-analyst average estimate of $19.50 billion. The reported number represents a year-over-year change of +11.7%.
- Revenue- Intelligent Cloud: $26.71 billion versus the 11-analyst average estimate of $26.22 billion. The reported number represents a year-over-year change of +21%.
- Revenue- More Personal Computing: $15.58 billion versus $14.93 billion estimated by 11 analysts on average. Compared to the year-ago quarter, this number represents a +17.5% change.
- Revenue- Product: $17.08 billion versus the two-analyst average estimate of $16.30 billion. The reported number represents a year-over-year change of +9.6%.
- Revenue- Service and other: $44.78 billion versus $44.20 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +20.2% change.
- Operating Income- Productivity and Business Processes: $10.14 billion versus $10.12 billion estimated by three analysts on average.
View all Key Company Metrics for Microsoft here>>>Shares of Microsoft have returned -2.9% over the past month versus the Zacks S&P 500 composite's -3% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.