Shares of Microsoft Corporation
For the first quarter, Microsoft reported EPS of $0.76, which was $0.07 ahead of Citi/$0.08 ahead of Street and non-GAAP revenue of $22.3 billion (non-GAAP) also topped Citi/Street estimate of $21.8 billion/ $21.6 billion, respectively.
Among key highlights, Azure growth surged (121 percent year-over-year versus 108 percent in the fourth quarter) and cloud gross margin rose above past four quarters flattish trend. In addition, Microsoft saw an increase in Office365 ASP.
However, the Windows OS maker again guided second quarter meaningfully below the Street.
“While we expect they can beat implied Op.Inc guidance (6 percent upside in Q3), we see numbers having more downside than upside as MSFT invests and churns through on-prem declines,” analyst Walter Pritchard wrote in a note.
However, the analyst noted that the company is doing the right things to reposition its Intelligent Cloud business.
“This landscape is a tough one for selling software IP and MSFT has a large installed base here in the midst of significant change in how software is built and run,” Pritchard highlighted.
Meanwhile, Pritchard slightly increased his price target by $1 to $41.
Shares of Microsoft closed Thursday’s trading at $57.25. In the pre-market hours Friday, they gained 5.97 percent to $60.67, and at last check, shares were up 4.49 percent at $59.82.
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|Oct 2016||William Blair||Upgrades||Market Perform||Outperform|
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