Microsoft's Office 365, Cloud Businesses Power Earnings
- Author: Douglas Reid Apr 28, 2017,
Apr 28, 2017, 1:04
LinkedIn contributed almost $1 billion in revenue to Microsoft's most recent quarter.
The earnings for Microsoft's fiscal third quarter come as chief executive Satya Nadella seeks to reduce the tech giant's focus on software, shifting to cloud computing and business services.
Shares in Microsoft fell 1.8 percent in after-hours trade on the results. In the Productivity and Business Processes segment, which includes the Office franchise, revenue climbed 22% to $7.96 billion.
Maersk, a "global leader in container shipping and ports", and a big win for Microsoft with its 88,000 employees working in 130 countries, announced today that it too is making a Digital Difference, making Microsoft its preferred cloud partner and using Azure to power its app store and help drive business model innovations. Revenue in Productivity and Business Processes increased by 22%, with Office commercial products and cloud services' revenue increasing by 7%.
Revenue in the three months ended in March rose 6.3%, year over year, to $23.56 billion, yielding EPS of 73 cents.
Microsoft said revenue from its "Intelligent Cloud" rose 11 percent from a year earlier to $6.8 billion.
Samsung is allegedly prepping the 7th gen OLED displays and foldable OLEDs
Practically speaking, a 4 mm bezel all around the iPhone 8 would make it more durable if and when it is dropped. It seems there will be some radical design changes in the iPhone 8, Apple's flagship phone for 2017.
Wall Street was looking for non-GAAP earnings of 70 cents a share on revenue of $23.62 billion for the third quarter. Office 365 consumer subscribers increased from a total of 24.9 million last quarter to 26.2 million.
However, after falling by 2% last quarter, Surface revenue dropped by a massive 26% (25% CC), which Microsoft attributed to "increased price competition in the premium 2-in-1 category and product end-of-lifecycle dynamics".
Microsoft said it was encouraged by sales of devices from other manufacturers - revenue from sales of Windows to other manufacturers was up 5% in constant currency, ahead of the overall PC market.
Microsoft isn't likely to break out Azure revenue until it's a larger part of the commercial cloud pie.
To the surprise of no-one, it was another terrible quarter for Microsoft's phone hardware business, with revenue falling by $730 million.
Search revenue, excluding traffic acquisition costs, also increased by 8% (9% CC), "driven by higher revenue per search and search volume".