Microsoft crushes earnings and reports $110 billion in annual revenue, stock jumps 4% on strong guidance (MSFT)

Satya Nadella

REUTERS:Shannon Stapleton

Microsoft reported earnings after the bell on Thursday. After initially moving not much at all, Microsoft stock jumped over 4% in after-hours trading. The jump occurred after Microsoft gave guidance for the next quarter on a conference call with investors. 

Here's what Microsoft reported:

• Earnings per share of $1.14, versus $1.08 expected (GAAP).

• Revenue of $30.1 billion, versus $29.2 billion expected.

Notably, this marks the end of Microsoft's 2018 fiscal year. The company reported $110.4 billion in revenue over the past 12 months, marking the first time it has passed the $100 billion mark.

For the quarter, Microsoft showed strong growth in all three of its major reporting areas — especially in cloud computing, where Wall Street most wants to see growth.

Productivity and Business Processes, the unit that includes Microsoft Office, was up 13% from the year-ago period, to $9.7 billion. Intelligent Cloud, which encompasses the Microsoft Azure cloud-computing platform and related technologies, was up 23%, to $9.6 billion. And More Personal Computing, which includes Windows, the Xbox, and the Surface hardware business, was up 17%, to $10.8 billion.

Notably, Azure — considered the leading rival to the dominant Amazon Web Services — saw revenue growth of 89% from the same period in 2017, though Microsoft doesn't disclose specific financials for the service.

Overall, Microsoft says its commercial cloud revenue, which includes cloud business software and services like Azure and Office 365, is up 53% year over year, to $6.9 billion.

The Windows business was up 7% from the year-ago period, drawn by a stronger demand for PCs preinstalled with the professional version of Windows 10.

Other standouts include revenue from LinkedIn, up 37% from the same time last year, and gaming revenue, up 39%, with Xbox software and services up 36%. The Surface business is up 25% from this time last year, something Microsoft credits to both a strong hardware lineup this year and a 2017 performance that set the bar lower.

Also of note is that Microsoft says its GAAP results reflect a net benefit of $104 million related to the new tax law, as well as a $306 million charge related to restructuring.

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