- Microsoft Corporation (NASDAQ:MSFT) released its Q4 numbers just after the US market closed on Tuesday.
- Once again growth was dominated by its Azure cloud computing division where revenues jumped by 51%, helping the overall business to report a growth rate of 21%.
- Profits moved ahead by 47% compared to the same period a year ago, with growth flattered by the impact of the pandemic on the prior period.
- Earnings per share increased by 49% to $2.17 compared to a consensus expectation of $1.92
- Overall revenues of $26,2bn beat consensus by a margin of over 5%.
Microsoft's Q4 Earnings
Commenting on the numbers, Steve Clayton, HL Select fund manager said:
“We hold Microsoft shares as one of the biggest positions in our HL Select Global Growth Shares fund precisely because of the qualities the company has shown today. Microsoft’s long-established core products, Windows operating systems and Office software dominate their markets and look set to generate reliable cash flows for years to come. Their Azure cloud computing division is the number 2 global player and is growing like Topsy. Microsoft may be huge, but it is still growing at pace, as these figures demonstrate so clearly.
At the 2021 SALT New York conference, which was held earlier this week, one of the panels on the main stage discussed the best macro shifts coming out of the pandemic and investing in value amid distress. The panel featured: Todd Lemkin, the chief investment officer of Canyon Partners; Peter Wallach, the managing director and Read More
Few things are as valuable as cash generative businesses with dominant market positions in growing markets. Microsoft fits the bill perfectly, especially with a rising proportion of its revenues coming from recurring sources, like Office 365.
But expectations were high ahead of these numbers, and we suspect some investors were looking for even higher growth rates from Azure. The wider Nasdaq market took a 1.2% pasting
In normal market hours so perhaps it’s not that surprising that the stock dipped a couple of percent further in after-hours trading.”
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