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Microsoft Corp Is Up on Earnings Beat

The US technology giant increases sales

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Alberto Abaterusso
Jul 19, 2019
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Shares of Microsoft Corp. (

MSFT, Financial) traded 2.65% higher to close at $140.03 in after-hours trading on Thursday after the company beat forecasters by 16 cents on non-GAAP earnings of $1.37 and by $920 million on revenue of $33.72 billion for the final quarter of fiscal 2019.

Non-GAAP earnings increased 21% year-over-year, and revenue grew 12.12% compared to the prior-year quarter.

Fourth-quarter GAAP earnings per share increased 50% to $1.71 per share.

By segment, Intelligent Cloud reported 21% growth in constant currency to $11.39 billion. More Personal Computing increased 4% in constant currency to $11.28 billion, and Productivity and Business Processes climbed 17% in constant currency to $11.05 billion.

“Q4 commercial cloud revenue increased 39% year-over-year to $11.0 billion, driving our strongest commercial quarter ever,” Executive Vice President and Chief Financial Officer Amy Hood said.

The Redmond, Washington-based global technology company also reported financial results for the entire year of fiscal 2019, which ended June 30.

Revenue increased 14% year-over-year to $125.8 billion, operating income went up 23% to $43 billion and GAAP net income grew approximately 137.5% to $39.2 billion or $5.06 per diluted share. Non-GAAP net income rose 22% to $36.8 billion or $4.75 per diluted share.

Moreover, in full fiscal 2019, Microsoft recorded cash inflows of $52.2 billion from operations, up 19% from full fiscal 2018. The company repurchased $19.54 billion of its own common stock and allocated $13.81 billion to the payment of quarterly dividends. The tech giant also used about $15.77 billion to upgrade the assets base and for other investments.

The balance sheet had $133.82 billion in cash on hand and short-term securities and $72.18 billion in total debts as of June 30, 2019. The equity was worth $102.33 billion.

On Sept. 12, Microsoft will – in line with the previous quarterly dividend – pay 46 cents per common share to shareholders of record Aug. 15, with an ex-dividend date scheduled for Aug. 14.

Based on Thursday’s closing price of $136.42 per share, the quarterly dividend means 1.35% forward dividend yield versus the industry median of 1.65% and compared to the S&P 500 index dividend yield of 1.87%.

Microsoft Corp had a market capitalization of $1.05 trillion at close on Thursday. The stock has climbed 28% over the 52 weeks through July 18 to above the 200-, 100- and 50-day simple moving average lines. The 52-week range was $93.96 to $139.54.

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Over the same period, Microsoft has outperformed the S&P 500 index by nearly 24%.

Disclosure: I have no positions in any securities mentioned.

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