Soaring Cloud Divisions Help Push Microsoft Corporation (MSFT) to Earnings Beat

Shares of Microsoft Corporation (NASDAQ:MSFT) are on the move after the company delivered a solid earnings beat. The strong quarter was partially driven by impressive growth in the company’s cloud division.

Marketwatch has the details.

Microsoft Corp. stock rose more than 4% in the extended session Wednesday after the company’s cloud divisions pushed the software giant to a top- and bottom-line earnings beat.

The Redmond, Wash.-based company reported profit well above what Wall Street had expected, posting a net income jump of 34% to $8.8 billion, which amounts to earnings of $1.14 a share. Analysts polled by FactSet had expected net income of $7.46 billion, or 94 cents a share. Sales also topped expectations, up 19% to $29.08 billion compared with the year-earlier period.

Microsoft reports that its Intelligent Cloud segment grew 24 percent over the same period last year to $8.6 billion. Wedbush analyst Dan Ives provided some perspective on the company’s cloud growth in a note to clients.

“Microsoft just delivered an eye-popping cloud beat and a performance that speaks to a secular cloud story which is still in the early innings of playing out and supports our thesis that core enterprise cloud spending is actually accelerating into 2019 with Redmond front and center along with [Amazon Web Services] in this two horse race,” he wrote.

Microsoft Corporation shares rose $2.47 (+2.41%) in premarket trading Thursday. Year-to-date, MSFT has gained 21.16%, versus a 0.72% rise in the benchmark S&P 500 index during the same period.

MSFT currently has a StockNews.com POWR Rating of B (Buy), and is ranked #2 of 69 stocks in the Software – Application category.