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Microsoft's Q2 report earnings beat market expectations and its shareholders are well-rewarded

By Wong Chung Wee - on 1 Feb 2016, 5:01pm

Microsoft's Q2 report earnings beat market expectations and its shareholders are well-rewarded

(Image source: Microsoft)

Microsoft's second fiscal report earnings managed to beat market expectations. Forbes reported investors were pleased with the Redmond company's cloud computing forays, namely its Azure cloud services. Revenue from Azure services grew over 140% within the company's Intelligent Cloud business segment. As a whole, the unit's revenue increased 5% to US$6.3 billion.

Another business highlight is the ever-increasing number of subscribers to its Office 365 software suite. Microsoft reports that as of 31 December 2015, there were 20.6 million subscribers, and this is an over 13% increment over the preceding quarter, i.e., Q1 2016. In terms of revenue from Office 365 services, it increased over 70% but it failed to stem the 5% decline in total revenue from its Productivity and Business Processes market segment.

Revenue also fell for its More Personal Computing section by 5% to US$6.3 billion. The worldwide decline in PC shipment dragged down its Windows OEM revenue but its Surface revenue was boosted by its Surface Pro 4 and Surface Book launches. Not unexpected was its anemic revenue contribution of its Windows Phones, which declined 49%. Even the company has come clean about the shortcomings of its Windows 10 Mobile platform.

Investors appear to be pleased with its Q2 2016 report earnings and when the earnings were released on 28th January 2016, after 4pm PST, MSFT’s share price reached a high of US$56.09 in after-market hours, a 7.7% increase from its closing price of US$51.36 on the same trading day.

(Source: Microsoft, Forbes)

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