Microsoft Corporation Shares Dip After Earnings Report

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Microsoft Corporation Shares Dip After Earnings Report
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Microsoft released its latest earnings report after closing bell tonight, posting diluted earnings per share of 71 cents per share on $26.5 billion. Analysts had been expecting earnings of 71 cents per share on $26.3 billion in revenue. Operating income was $7.8 billion.

Key metrics from Microsoft’s earnings report

The diluted earnings results include a negative impact of 2 cents per share or $243 million related to the company’s ongoing restructuring efforts. The restructuring is related both to the plan announced this past July and also the integration of Nokia’s Devices and Services business into Microsoft.

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The company also revealed a negative impact of 4 cents per share in connection with income tax expenses that were the result of an adjustment from an audit with the IRS.

Microsoft’s earnings results by segment

Microsoft Corporation (NASDAQ:MSFT) reported that revenue from its Devices and Consumer segment increased 8% to $12.9 billion in the quarter. The company added that revenue from its Surface tablet sales rose 24% to $1.1 billion, with the main drivers being the Surface Pro 3 and accessories.

The number of Office 365 Home and Personal subscribers surpassed 9.2 million, a 30% quarter over quarter increase. Search ad revenue improved 23%, while Bing’s share of the U.S. market rose 150 basis points year over year to 19.7%. Microsoft sold 6.6 million Xbox consoles during the quarter and recorded $2.3 billion in Phone Hardware revenue, which includes 10.5 million Lumia handsets.

The Commercial segment saw a 5% increase in revenue, which rose to $13.3 billion. Microsoft reported a 114% increase in Commercial cloud revenue, with the main drivers being Office 365, Azure and Dynamic CRM Online. The company recorded a 1% decline in Office Commercial products and services revenue and a 9% increase in server products and services revenue.

Shares of Microsoft Corporation (NASDAQ:MSFT) ended the trading day down by 0.39% at $46.99 per share and then kept slipping in after-hours trading, dipping as low as $46 per share. Management said they will provide guidance in the upcoming earnings conference call.

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