Microsoft exceeds expectations
The Company beat the expectations of the analysts and customers by declaring excellent fourth quarter results. The excellent outcome was a result of continued growth in the Office franchise and the server software business. In addition, the increase in the sales of the Xbox has enabled the company to declare brilliant results.
For the fourth fiscal that ended 30 June, Microsoft reported an operating income of $6.17 billion, which is a four percent growth from the previous year. In addition, the total sales increased by eight percent at $17.37 billion. The Company’s Earnings per share increased to 69 cents that is a growth of thirty-five percent. Microsoft’s annual operating income was reported at $27.16 billion, which is an increase of thirteen percent over the previous year. The total sales increased by twelve percent to reach $69.94 billion. The EPS showed a growth of twenty-eight percent at $2.69.
Growth led by Office and Xbox
The chief financial officer of Microsoft Peter Klein said that the strong growth in the current fiscal year was driven by the numerous products and services that were released in the year. Moreover, Klein said that the cloud and platform investments made by the company had poised Microsoft for growth in the long term. In addition, Microsoft’s Business Division, which is the developer for the Company’s Office suite continued to show strong growth. This group posted revenue of $5.8 billion, which is a seven percent y-o-y growth. The Server and Tools division also contributed to the company’s growth posting sales of $4.6 billion with a twelve percent y-o-y growth rate. The Entertainment and Devices division, which is responsible for the Xbox business witnessed a thirty percent rise in sales at $1.8 billion.
Reduced momentum due to some factors
The Company’s Online Business division posted a net loss increase of six percent to reach $728 million on total sales amounting to $662 million. Moreover, Klein said that the Company was facing issues in its adCenter technology, which is the online buying and delivery system for Yahoo ads. The company continues to earn lower than expected revenue from search operations using the Microsoft technology.
Wall Street unimpressed
Although, Microsoft reported excellent results for the fourth quarter, which exceeded the analyst expectations, the Wall Street did not rejoice with this reporting. The Company’s stock did not witness any significant movement and closed at $27, which was a decrease of nine cents over its previous close.