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Microsoft stock pops then drops after earnings beat

Microsoft stock rose by as much as 4 percent after the company reported its earnings for the fourth quarter of its 2017 fiscal year, which ended on June 30. However, the stock flattened out after the company offered guidance for the next quarter. The company beat analysts' estimates on earnings per share and revenue.

  • EPS: Excluding certain items, 98 cents in earnings per share vs. 71 cents per share as expected by analysts, according to Thomson Reuters.
  • Revenue: Excluding certain items, $24.7 billion vs. $24.27 billion as expected by analysts, according to Thomson Reuters.

Azure revenue increased 97 percent year over year, and Azure's gross margin improved in the quarter, Microsoft said in its earnings statement. In the cloud business that Microsoft is so focused on these days, Alphabet with its G Suite and Google Cloud Platform, represents competition. Amazon is also a significant player with its market-leading Amazon Web Services public cloud.

In its earnings statements Microsoft doesn't provide exact revenue for Azure, but the company does talk about Azure revenue under its commercial cloud heading, which also includes Dynamics 365 and Office 365 commercial plans. Microsoft's commercial cloud "strength should...