Software leader Microsoft late Tuesday crushed Wall Street's targets for its fiscal first quarter thanks to strong cloud computing business. It also guided analysts higher for the current quarter. MSFT stock rose in extended trading.
The Redmond, Wash.-based company earned $2.99 a share on sales of $56.5 billion in the quarter ended Sept. 30. Analysts polled by FactSet had expected Microsoft earnings of $2.65 a share on sales of $54.5 billion. On a year-over-year basis, Microsoft earnings increased 27% while sales climbed 13%.
Microsoft Cloud revenue rose 24% year over year to $31.8 billion in the September quarter, Chief Financial Officer Amy Hood said in a statement.
In a news release, Microsoft Chief Executive Satya Nadella touted the company's initiatives in artificial intelligence.
"We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers," Nadella said. "With copilots, we are making the age of AI real for people and businesses everywhere."
MSFT Stock Rises After Report
For the current quarter, Microsoft predicted sales of $60.9 billion, based on the midpoint of its outlook. Wall Street had been looking for $58.7 billion in the fiscal second quarter.
In after-hours trading on the stock market today, MSFT stock climbed 3.5% to 342.04. During the regular session Tuesday, MSFT stock rose 0.4% to close at 330.53.
Of Microsoft's three business units, Intelligent Cloud was the top performer in the September quarter. Revenue in the segment increased 19% to $24.3 billion. The unit includes server products and cloud services such as Azure.
Azure cloud infrastructure sales surged 29%, beating Wall Street's target of 26% growth.
Microsoft's Productivity and Business Processes unit saw sales rise 13% to $18.6 billion. The division includes Office productivity software as well as the Dynamics and LinkedIn businesses.
And finally, Microsoft's More Personal Computing unit saw sales increase 3% to $13.7 billion. The unit includes Windows PC software, Xbox video games, Surface computers, internet search and advertising.
Microsoft Stock In Consolidation Pattern
MSFT stock has been consolidating for the past 15 weeks with a buy point of 366.78, according to IBD MarketSmith charts.
Further, MSFT stock is on two IBD lists: Long-Term Leaders and Tech Leaders.
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