Shareholders of Microsoft Corp. (MSFT, Financial) are basking in the afterglow of yet another impressive earnings report, which was unveiled just before market close today.
Microsoft’s cloud and corporate software business, which allows businesses to run applications and store data at its data centers, made unprecedented gains, as did LinkedIn and growth in Xbox hardware among gaming enthusiasts.
Microsoft’s commercial cloud business grew 56% year over year to $5.3 billion.
All told, the Silicon Valley tech giant reported a 12% increase in revenues to $28.9 million in the quarter ending Dec. 31, beating Wall Street estimates.
Tax hit
The corporation also took a $13.8 billion hit, translated in a loss of 82 cents per share, as a result of the Tax Cuts and Jobs Act. Before the one-time charge, earnings stood at 96 cents per share.
A net loss of $6.3 billion in operating income also reflected the tax charge. Without it, net income stood at $7.5 billion.
The corporation reported $7.9 billion in net cash from operations versus $6.3 billion in the same period in 2016.
The company was also happy to report it was returning $5 billion to shareholders in the form of share repurchases and dividends later in the year.
In late afternoon trading, the tech giant’s shares were up 2.45% at $94.91.
Today’s figures reflected the company’s financial performance during the quarter ended Dec. 31.
Growth in Office 365
The corporation reported a gain of 25%, or $9 billion, in its segment that covers productivity and businesses processes.
The increase was due, in part, to growth in Office 365, which increased its consumer subscribers to 29.2 million. Those customers sign up for online subscriptions of productivity programs like Word and Excel.
LinkedIn contributed revenue of $1.3 billion during the quarter with sessions growth of over 20% for the fifth consecutive quarter.
Revenue in Intelligent Cloud was $7.8 billion and increased 15%.
In More Personal Computing, revenues were up $12.2 billion, or 2%. This included gains in Windows OEM revenue and gaming revenue driven by Xbox hardware growth, including the launch of Xbox One X.
GuruFocus indicators
The corporation has a market cap of $728 billion and an enterprise value of $679 billion.
It has a financial strength rating of 6 of 10 and a profitability and growth rating of 8 out of 10.
The company has a price-earnings (P/E) ratio of 31.91, which is lower than 52% of its global competitors. The median is 26.92.
It has a price-book (P/B) ratio of 8.10, which is lower than 81% of its peers. The median is 3.13.
Among its well-known shareholders are the T Rowe Price Equity Income Fund (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Dodge & Cox and Steve Mandel (Trades, Portfolio).
Bill Gates (Trades, Portfolio) owns more than 56 million shares of Microsoft, compared to Ken Fisher (Trades, Portfolio)’s nearly 17 million shares of the stock, which make up 16% of his holdings.
