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Microsoft Corporation FQ1 2018 Earnings Boosts Shares

Microsoft Corporation (NASDAQ:MSFT) FQ1 2018 earnings were released after closing bell tonight, and the company posted earnings of 84 cents per share, a 17% increase from last year, on $24.5 billion in sales, a 12% year-over-year increase. Wall Street had been looking for earnings of 72 cents per share on $23.5 billion in revenue. The company had guided for between $23 billion and $23.7 billion, and in the year-ago quarter.

Microsoft FQ1 2018 Earnings
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Microsoft FQ1 2018 earnings

Productivity and Business Processes rose 28% to $8.2 billion on the back of a 10% increase in Office commercial products and cloud services, which includes a 42% increase in Office 365 commercial revenues. Office consumer products and cloud revenues rose 12%, while Dynamics products and cloud revenues rose 13%, including a 69% increase in Dynamics 365 revenue. LinkedIn revenues amounted to $1.1 billion.

“This quarter we exceeded $20 billion in commercial cloud ARR, outpacing the goal we set just over two years ago,” Microsoft CEO Satya Nadella said in a statement. “Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform.”

Intelligent Cloud revenue rose 14% to $6.9 billion, including a 17% increase in server products and cloud revenue and a 1% increase in Enterprise Services revenue. More Personal Computing revenue was relatively flat year over year at $9.4 billion as Windows OEM revenue grew 4% and Windows commercial products and cloud revenue increased 7%. Search ad revenue excluding traffic acquisition costs grew 15%, and Surface revenue rose 12% driven by Surface Laptop sales.

Microsoft returns capital to shareholders

Microsoft returned $4.8 billion to shareholders during its first fiscal quarter through dividends and share buybacks. The company boosted its quarterly dividend 8% to 42 cents per share during the quarter.

Following the Microsoft FQ1 2018 earnings release, the company’s stock surged in after-hours trades, climbing by as much as 2.51% to $80.74.