Microsoft's Surface revenue up 32 percent alongside its booming cloud

Microsoft Earnings: What to Look For

The Redmond, Wash. -based company earned 95 cents a share, up 36% year over year, for its fiscal third quarter.

Microsoft's Productivity and Business Processes unit, which includes its Office, Dynamics and LinkedIn businesses, saw revenue increase 17% to $9 billion in the quarter. The consensus estimates called for EPS of $0.85 on revenues of $25.77 billion.

Microsoft said LinkedIn, the professional social network it recently acquired, saw revenues up 37 percent from a year ago.

The so-called "Intelligent Cloud", which includes Microsoft's server business and its Azure enterprise operations produced $7.9 billion in revenues, up 17 percent. Operating income grew by 23% (20% CC) to $8.3 billion, and net income grew by 35% (31% CC) to $7.4 billion. "We are innovating across key growth categories of infrastructure, AI, productivity and business applications".

“With consistent investment and strong sales execution, this quarter we achieved better than expected performance across all segments, ” said Amy Hood, executive vice president and chief financial officer at Microsoft.




There are now 30.6 million Office 365 consumer subscribers, with Office consumer products and cloud services revenue growing by 12% (9% CC).

In terms of guidance, analysts are expecting Microsoft to forecast $28.01 billion in revenue for its fiscal fourth quarter, according to Thomson Reuters.

Further, Gaming Revenue was $2.25 billion dollars for the quarter, which is about $300 million more than the prior year for the same time period. Nadella's cloud-centric campaign has included a major re-org of Microsoft's business units to focus on cloud services.

In after-hours trading, it was down about 1 percent to $93.30 per share. Xbox gaming revenue grew by 24% thanks to third-party games titles.

Microsoft stock, which has been hovering close to the $100 per share mark for much of 2018, is down slightly following the company's latest financials.

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