Microsoft Q4 Beat Doesn't Move Investors

Microsoft Corp. (NASDAQ: MSFT) released fiscal fourth-quarter financial results after markets closed Wednesday. The firm said that it had $1.46 in earnings per share (EPS) and $38.0 billion in revenue, compared with consensus estimates that called for $1.37 in EPS and $36.5 billion in revenue. The same period from last year had $1.37 in EPS and $33.72 billion in revenue.

During the fourth quarter, COVID-19 spurred demand in the Productivity and Business Processes and Intelligent Cloud segments. Cloud usage and demand increased as customers continued to work and learn from home.

At the same time, transactional license purchasing continued to slow in small and medium businesses, and LinkedIn was negatively impacted by the weak job market and reductions in advertising.

In terms of its segments, the company reported:

  • Revenue in Productivity and Business Processes was $11.8 billion and increased 6% (up 8% in constant currency).
  • Revenue in Intelligent Cloud was $13.4 billion and increased 17% (up 19% in constant currency).
  • Revenue in More Personal Computing was $12.9 billion and increased 14% (up 16% in constant currency).

For the quarter, operating expenses were $12.3 billion and increased 13%, including a $450 million charge for the closure of the Microsoft Store physical locations.

Microsoft returned $8.9 billion to shareholders in the form of share repurchases and dividends in the quarter, an increase of 16% year over year.

On the books, cash, cash equivalents, and short-term investments totaled $136.53 billion at the end of the quarter, versus $122.46 billion at the end of fiscal 2019.

Shares of Microsoft closed Wednesday at $211.75, with a 52-week range of $130.78 to $216.38. The consensus analyst price target is $212.03. Following the announcement, the stock was initially down about 2% at $206.89 in the after-hours trading session.