Microsoft Rises on Solid Earnings Beat

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Microsoft Corp. (NASDAQ: MSFT) reported fiscal first-quarter financial results after markets closed on Thursday. The company posted $0.76 in earnings per share (EPS) and $22.3 billion in revenue. There were consensus estimates from Thomson Reuters that called for $0.68 in EPS on $21.71 billion in revenue. The same period from last year had $0.67 in EPS on $21.66 billion in revenue.

One of the key highlights from the report was that Azure revenue grew 116% (up 121% in constant currency) with Azure compute usage more than doubling year-over-year.

Also, Microsoft expects to close the acquisition of LinkedIn Corporation and the sale of its entry-level feature phone business in the second quarter of fiscal year 2017.

The company returned $6.6 billion to shareholders in the form of share repurchases and dividends in the first quarter of fiscal year 2017. During the quarter, the company announced an 8% increase in its quarterly dividend to $0.39 per share, a new share repurchase program authorizing up to $40 billion in share repurchases, and reaffirmed it is on track to complete its current $40 billion share repurchase program by the end of the year.

Satya Nadella, CEO of Microsoft, commented:

We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences. We continue to innovate, grow engagement, and build our total addressable market.

On the books, cash, cash equivalents, and short-term investments totaled $136.9 billion at the end of the quarter, versus $113.2 billion.

Shares of Microsoft closed Thursday at $57.11, with a consensus analyst price target of $59.79 and a 52-week trading range of $47.09 to $58.70. Following the release of the earnings report, the stock was up 5.5% at $60.42 in the after-hours trading session.

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