Microsoft (MSFT) Tops Q3 Earnings And Revenue Estimates
Zacks Investment Research | Apr 27, 2017 11:02PM ET
Microsoft Corporation (NASDAQ:MSFT) reported third-quarter fiscal 2017 earnings (adjusted for Windows 10 deferrals and currency effect) of 73 cents per share, which beat the Zacks Consensus Estimate by 4 cents. Earnings per share (EPS) increased 15% year over year but declined 12% on a sequential basis.
Revenues (adjusted for Windows 10 deferrals) of $23.56 billion decreased 9.6% sequentially but increased 6.3% from the year-ago quarter (up 7% in constant currency or CC). Further, it exceeded the Zacks Consensus Estimate of $23.55 billion.
Encouragingly, annuity-based revenue continued to grow indicating that the user base continues to migrate to the cloud. We note that strong cloud growth has helped Microsoft to outperform the S&P 500 on a year-to-date basis. While the company has gained 8.1%, the S&P 500 witnessed an increase of 6.7%.
Segment Details
Productivity & Business Processes includes the Office and Dynamics CRM businesses. Revenues increased 7.8% sequentially and 22% (up 23% CC) on a year-over-year basis to $7.96 billion.
The Commercial business (products + Office 365 & related cloud services) revenue was up 7% from year-ago level (up 8% CC). Office 365 commercial revenue grew 45% (same at CC). Office 365 saw commercial seat growth of 35% from the year-ago quarter.
Microsoft Corporation Price, Consensus and EPS Surprise
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