News

Microsoft Beats Estimates on Q1 Earnings Per Share

Microsoft beat analyst estimates in its first quarter earnings report released Thursday, and saw its stock price surge in after-hours trading.

Microsoft reported earnings of 76 cents a share for the quarter ended Sept. 30, well above the 68 cents a share analysts expected. The earnings came on revenues (non-GAAP) of $22.3 billion, also above Thomson Reuters consensus estimates of $21.7 billion.

The combination pushed Microsoft shares nearly 6% above the closing price to $60.65 in after-hours trading.

In a statement, CFO Amy Hood credited Microsoft's cloud investments for some of the company's gains. "Our first quarter results showed continued demand for our cloud-based services," Hood said. "We continue to invest, position ourselves for long-term growth, and execute well across our businesses."

Microsoft divides its business into three broad categories, two of which gained in the quarter, while the largest of the three fell. Productivity and Business Process was up 5% to $6.7 billion. Intelligent Cloud was up 8% to $6.4 billion. More Personal Computing was down 2% to $9.3 billion.

Highlights included a commercial cloud annualized run rate exceeding $13 billion; 116% growth in Azure revenues, including a doubling of Azure compute usage; 51% growth in Office 365 commercial revenue; a 38% bump in Surface revenues to about $926 million; and 11% growth in both Dynamics products/services revenues and server products/cloud services revenues.

Areas of weakness included flat Windows OEM revenues, a 72% decline in phone revenues and a 5% drop in gaming revenues.

Microsoft also said it expects to close the acquisition of LinkedIn Corp. and the sale of its entry-level feature phone business in the current quarter (Q2 '17).

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

Featured

  • Hands-On AI Skills Now Outshine Certs in Salary Stakes

    For AI-related roles, employers are prioritizing verifiable, hands-on abilities over framed certificates -- and they're paying a premium for it.

  • Roadblocks in Enterprise AI: Data and Skills Shortfalls Could Cost Millions

    Businesses risk losing up to $87 million a year if they fail to catch up with AI innovation, according to the Couchbase FY 2026 CIO AI Survey released this month.

  • Microsoft Cuts Windows 11 Recovery Time with New Update

    Microsoft has introduced two key enhancements to Windows 11 aimed at minimizing downtime and streamlining error resolution.

  • Microsoft Offers Support Extensions for Exchange 2016 and 2019

    Microsoft has introduced a paid Extended Security Update (ESU) program for on-premises Exchange Server 2016 and 2019, offering a crucial safety cushion as both versions near their Oct. 14, 2025 end-of-support date.