by Ian Harvey
February 07, 2020
The Redmond software giant Microsoft, reported on January 29, 2020, with earnings of $1.51 (better than the Consensus Estimate of $1.32), up 16.67% from the year-ago reported number, on revenue of $36.91 billion (also better than the Consensus of $35.71 billion), up 14% year over year. Profits surged 38% to $11.6 billion, according to a corporate statement.
Microsoft Corporation main driver of the stellar results was its cloud business with Windows also remaining strong.
The sustained strength in its cloud business was driven by first of all, its hybrid approach and position as the legacy provider, which in combination helps transfer corporate workloads to its cloud.
Amy Hood said on the call, “The Azure growth number is all about usage…
We had good signings of agreements in the quarter and that contributed to
bookings, and we had a good underlying consumption quarter.” That’s
probably why Azure growth accelerated in the last quarter to 62% from 59% in
the preceding quarter, driving commercial cloud revenue growth of 39% and a
5-point expansion in commercial cloud gross margin to 67%.
Under Satya Nadella, chief executive officer, Microsoft is succeeding by being the vendor of choice in the corporate world because its business is large, and likely to get much larger.
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Corporation Options Trades Potential Profits for Past 12 Months.....
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Microsoft Corporation is growing quickly because it’s big. The company has the largest network of state-of-the-art data centers. These data farms are strategically located all over the world, to reduce latency.
Moreover, Microsoft has legions of engineers well-equipped to ferret out malicious software, while helping enterprises make the jump to public cloud, hybrid cloud and edge computing. The good news is the corporate world is still in the early stages of the move to cloud-based systems. Microsoft is winning that transition.
A big part of Microsoft’s success is staking out leadership positions in the platforms of the future.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for Microsoft, as there has been strong agreement among the covering analysts in raising estimates.
The question remains......Will Microsoft Corporation Continue Its Upward Trend?
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It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!