Microsoft Stock Surges To Post Dotcom High On Earnings Beat

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Software giant Microsoft (NASDAQ:MSFT) has delivered impressive Q1 FY 16 results which has topped consensus estimates. The company has reported non-GAAP revenue of 21.7 billion, representing a 6.5% Y/Y decline and non-GAAP net income of $5.4 billion and non-GAAP EPS of $0.67. On a GAAP basis, Microsoft reported revenue of $20.4 billion, 12% lower than the prior year; net income of $4.6 billion compared to $4.54 billion a year ago and EPS of $0.57, 5.6% better than last year’s comparable period. The huge disparity between GAAP and non-GAAP results highlight the big negative effect that FX headwinds are continuing to have on Microsoft.

Microsoft hiked its quarterly dividend to $0.36 and bought back shares worth $6.9 billion during the quarter.

Luckily, the market was prepared for the FX impact. Microsoft stock is up 10% to $52.87, its highest since March 2000, as the investing world gave the thumbs up to the company.

Segment Revenues

A more comprehensive look into Microsoft earnings result can be seen below:

Source: Microsoft

Microsoft reorganized its segments for the second time in three years. Its results now fall under three main segments:

Segment results were a mixed bag. Overall, Intelligent Cloud grew 8% Y/Y to $5.9 billion; Productivity and Business Processes revenue fell 3% Y/Y to $6.3 billion while Personal Computing revenue declined 17% to $9.4 billion.

Items of particular note were Office 365, Azure, and Windows OEM. Microsoft said that Office 365 revenue grew nearly 70% in constant currency terms, with an additional 3 million Office 365 users added to the fold to bring up the number to 18.2 million subscribers. Azure revenue and compute usage more than doubled.