Software giant Microsoft (MSFT) late Tuesday smashed Wall Street’s targets for the September quarter thanks to strong demand for its cloud computing products. However, the Microsoft earnings report caused MSFT stock to waver in extended trading.
The Redmond, Wash.-based company earned $1.82 a share on sales of $37.15 billion in its fiscal first quarter ended Sept. 30. Analysts expected Microsoft earnings of $1.54 a share on sales of $35.72 billion. On a year-over-year basis, Microsoft earnings rose 32% while sales climbed 12%.
“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31% year over year,” Chief Financial Officer Amy Hood said in the Microsoft earnings news release. “We continue to invest against the significant opportunity ahead of us to drive long-term growth.”
In the December quarter, Microsoft expects to generate sales of $39.95 billion, based on the midpoint of its outlook. Wall Street was modeling $40.4 billion.
Microsoft Earnings News Pushes MSFT Stock Lower
Revenue in Microsoft’s Intelligent Cloud segment rose 20% to $13 billion in the September quarter. Server software and Azure cloud services drove the gains. However, Azure revenue growth of 48% was below Wall Street’s target of 50% as momentum in that business slows.
Microsoft’s Productivity and Business Processes segment saw revenue grow 11% to $12.3 billion. Office 365 productivity software, Dynamics software and LinkedIn services led the unit.
Revenue in the company’s More Personal Computing segment climbed 6% to $11.8 billion. Xbox video games and Surface computers were the biggest gains in the group.
In after-hours trading on the stock market today, MSFT stock alternated between gains and losses. In recent trades, it was down 1.8%, near 209.40. During regular-session trading, ahead of the Microsoft earnings report, MSFT stock increased 1.5% to 213.25.
MSFT Stock Is On Multiple IBD Stock Watchlists
Microsoft stock ranks No. 31 on the IBD 50 list of top-performing growth stocks. MSFT stock also is on IBD’s prestigious Leaderboard stock list and the IBD Long-Term Leaders screen.
Microsoft stock has formed a cup-with-handle base with a buy point of 225.31, according to IBD MarketSmith charts.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
Is Apple Stock A Buy Right Now? Here’s What Its Stock Chart Shows
Is Netflix Stock A Buy Right Now? Here’s What IBD Charts Show
IBD’s ETF Market Strategy
Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks
See Stocks On The List Of Leaders Near A Buy Point