Microsoft scored its first all-time high record since 1999 after reporting a strong quarter that beat Wall Street expectations.
The company reported $0.76 earnings on an adjusted basis, beating analysts' expectations of $0.68 per share, and $22.3 billion revenue on a non-adjusted basis, beating analysts' expectations of $21.7 billion. The newly reported revenue also marks a notable 2.3 percent increase compared with the same period last year.
Company shares soared to an all-time high past $60 following Microsoft's financial report for its first fiscal quarter of 2017, driven by its strong cloud business. The 5 percent increase to $60 per share in after-hours trading marks the first time Microsoft reached an all-time high since December 1999.
"Our first quarter results showed continued demand for our cloud-based services," says Amy Hood, Microsoft's chief financial officer and executive vice president. "We continue to invest, position ourselves for long-term growth, and execute well across our businesses."
The increased adjusted revenue of $22.3 billion includes roughly $1.9 billion in Windows 10 sales, which Microsoft defers to the following years to abide by accounting rules.
As Microsoft is gradually moving toward selling subscription and usage-based software, investors are now expecting to see continued growth in the company's cloud computing business segment. If the latest performance report is any indication, Microsoft is on the right path.
The company has an 8 percent increase to $6.4 billion in revenue in Intelligent Cloud, the business unit that includes the Microsoft Azure cloud computing service and Microsoft's other tools for servers and data centers. Azure saw a particularly strong growth, jumping 116 percent from the same period last year.
Microsoft also saw a 6 percent increase in revenue for its Productivity segment, which reached $6.7 billion. The company's Office 365 cloud productivity service was the main driver in this category, fueling massive subscriptions from both businesses and consumers. The Dynamics software business played a big role in Microsoft's impressive results as well, jumping 11 percent from the same period last year.
Despite these notable achievements, however, Microsoft still saw a decline in the More Personal Computing segment, which saw a 2 percent drop to $9.3 billion. That's not too bad considering the PC market slowdown. What is bad is Microsoft's ailing phone business, which took a massive 72 percent dive. The company also registered a 5 percent decline in Xbox revenue.
Nevertheless, hitting the first all-time high in 17 years is an impressive achievement and Microsoft's first fiscal 2017 results show strong performance that exceeded all expectations.
