Microsoft Reports Fourth Quarter and Full Fiscal Year Earnings

Microsoft Corp (MSFT). reported if fourth quarter and 2020 full fiscal year earnings at market close on Wednesday. The results beat analysts’ expectations for the overall results, but failed to meet estimates on a major business unit which includes its Office products.

Here’s a breakdown of the company’s Q4 report compared to analysts’ estimates:

·        Revenue: $38 billion vs Wall Street’s expected $36.5 billion, compared to $33.7 billion the same period a year ago.

·        Earnings: $1.46 per share vs $1.37 per share, expected

·        Profits: $11.2 billion, down 15%

And a breakdown if the company’s report for its fiscal year 2020:

·        Revenue: $143 billion, up 14%

·        Earnings: $5.76 per share, up 14%

·        Profit: $44.3 billion, up 13%

Following the company’s release, shares were down more than 2% in after hour trading to less than $206 per share.

The company had a good result overall, beating many of its important metrics for its Q4 however, failed to meet expectations of an important business unit that includes its Office 365 cloud productivity suite and the Microsoft Team Communications app. The business unit is called the “Productivity and Business Processes” which includes office products, generated $11.75 billion in the fourth quarter compared to analysts’ estimates of $11.9 billion.

“We are the only company with an integrated, modern technology stack—powered by cloud and AI and underpinned by security and compliance—to help every organization transform and reimagine how they meet customer needs,” said Microsoft CEO Satya Nadella.

So far this year, Microsoft has hit new all-time highs, with its shares rising more than 34%. In regular trading on Wednesday, the company’s stock rose more than 1.3%.

The company’s cloud business unit saw a 17% increase in revenue to $13.4 billion, while its personal computing business unit saw a 14% increase in revenue to $12.9 billion.

“Our commercial cloud surpassed $50 billion in annual revenue for the first time this year. And this quarter our Commercial bookings were better than expected, growing 12% year-over-year,” said executive vice president and chief financial officer Amy Hood. “As we drive growth across the company, we remain committed to investing in long-term strategic opportunities.”

Operating expenses for the fourth quarter rose 13% to $12.3 billion, with the inclusion of $450 million charge for the closure of physical locations of Microsoft Store.

Summary of Microsoft Corp. earnings report for the fourth quarter which ended June 30, 2020, as compared to the same period a year ago:

Source: Microsoft