Microsoft (MSFT) Stock: Gains Big On Earnings

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Microsoft Corporation (NASDAQ: MSFT)

Microsoft is having an incredibly strong day in the market today, and for good reason. The company released its earnings report for the most recent quarter, blowing away analyst expectations. Today, we’ll talk about what we saw from earnings, how investors are reacting to the news, and what we can expect to see from MSFT moving forward.

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MSFT Blows Away Earnings

As mentioned above, Microsoft is having an incredibly strong day in the market today after reporting earnings. The report for the fourth fiscal quarter came in yesterday after the closing bell. Here’s what we saw from the report:

  • Earnings Per Share – In terms of earnings per share, MSFT definitely did not disappoint. During the fourth quarter, analysts were expecting that the company would generate earnings in the amount of $0.58 per share. However, the company blew this expectation out of the water, generating $0.69 per share. While the fact that this came in above analyst expectations is good, there’s better news here. Analysts were expecting to see a year-over-year decline from $0.60 in the same quarter one year ago. However, the company actually showed a strong year-over-year gain.
  • Revenue – As if beating earnings expectations wasn’t enough, MSFT added to the excitement by beating revenue expectations as well. During the fourth quarter, top-line forecasts came in at $22.14 billion in revenue. However, the company actually generated revenue in the amount of $22.6 billion. Once again, this shows strong year-over-year growth from $22.18 billion in the same quarter one year ago.

Following the release of the strong data, Microsoft CEO Satya Nadella had the following statement to offer:

This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations. The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.”

How The Market Reacted To The News

As investors, we know that the news is important, especially earnings news. After all, positive earnings can send a stock upward while negative earnings can send it tanking. In this particular case, MSFT needed the strong results that it produced. Before the report was released, the stock was down more than 4% on the year. However, following the strong release, it’s seeing big gains, pushing it back into green territory. Currently (2:11), the stock is trading at $56.61 per share after a gain of $3.52 per share, or 6.63%, thus far today.

What We Can Expect To See Moving Forward

For some time now, sentiment surrounding Microsoft stock hasn’t been very positive. This is understandable considering current economic conditions as well as the company’s ongoing transformation. Nonetheless, through today’s earnings report, MSFT proved that the transformation is going well and that they are on track for gains. All in all, things are looking up for this stock!

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What Do You Think?

Where do you think MSFT is headed moving forward and why? Join the discussion at TalkTRENDZ!

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