Revenue growth and forecasts
Microsoft reported stronger fourth fiscal quarter results than Wall Street expected on Tuesday. Component shortages for Xbox and Surface were offset by strong sales of Azure, software products and digital advertising.
Microsoft (MSFT) on Tuesday summed up the company's fourth quarter and full fiscal 2021 results, giving investors an outlook for the first quarter of the new fiscal year.
Slight declines in revenue from Xbox console and video game content sales (-4%) and lower revenue (-3%) from Windows software licence sales to consumer PC manufacturers were offset by strong 53% growth from digital advertising.
Q4 report
earnings per share rose 49% to $2.17, above analysts' average estimates of $1.92.
Quarterly earnings totaled $16.5 billion, up 47%.
Total quarterly revenues accelerated to 21% and $46.15 billion, beating Wall Street estimates of $44.24 billion.
The company's key cloud computing division Azure posted solid revenue growth of 51%, but the company did not disclose the exact amount of its revenue.
Azure's steadily strong revenue growth proves its ability to compete with Amazon Web Services from Amazon (AMZN), the global cloud computing market leader.
The news that the Pentagon has decided to split its $10 billion cloud contract between Microsoft and AWS has not significantly affected Microsoft shares, which are trading near all-time highs.
Microsoft shares have risen 28.8% since the start of the year, outperforming the average growth rate of technology industry stocks, with the Nasdaq Composite Index up 13.75% since the start of the year.
Microsoft's total revenues for FY2021 rose 18%. 2021 rose 18% to $168.1 billion, with annual earnings up 37% to $60.7 billion and earnings per share of $7.97.
Microsoft's outlook for 1Q fiscal 2022
- Microsoft's forecasts for three key divisions: Productivity and Business Processes;
- Intelligent Cloud;
- More Personal Computing;
- for the first quarter exceeded market analysts' average estimates.
In the fourth fiscal quarter, Microsoft announced its intention to acquire voice recognition company Nuance Communications for $19 billion, including debt.
