Microsoft Revenue Surges on Cloud Strength. Is the Stock a Buy?
The larger a company grows, the more difficult it is to generate market-beating returns -- at least in theory. Yet, even in the middle of a market downturn, Microsoft (NASDAQ: MSFT) showed why it's the exception to the rule, defying detractors and handily beating Wall Street's expectations. At the same time, however, the company sounded warning bells about its future growth, sending its stock sinking.
For its fiscal first quarter (ended Sept. 30), the tech giant reported revenue of $50.1 billion, up 11% year over year or 16% in constant currency. At the same time, diluted earnings per share (EPS) clocked in at $2.35, down 13% year over year or 7% in constant currency. Both metrics easily surpassed analysts' consensus estimates, which called for sales of $49.7 billion and EPS of $2.31. Unfortunately, this also marked Microsoft's lowest rate of revenue growth in five years.
One of the most highly anticipated figures in Microsoft's report is the performance of its intelligent cloud segment, which generated revenue of $20.3 billion, up 20% year over year. The highlight of the segment was Azure cloud, which grew 35%.
Source Fool.com
