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Microsoft Stalls in Post-Earnings Trading: What Wall Street's Saying

Stocks in this article: MSFT

NEW YORK (TheStreet) –– Microsoft (MSFT - Get Report) shares closed flat on Wednesday after Tuesday's quarterly report beat revenue expectations but missed on the bottom line.

In its fiscal fourth quarter, Microsoft reported 55 cents per share on revenue of $23.4 billion, an 18% increase from a year earlier. Analysts polled by Thomson Reuters expected earnings of 60 cents per share on $22.99 billion in revenue. Two billion dollars in revenue came from the company’s Nokia acquisition. Revenue from Microsoft’s Bing search engine, which now holds a 19% US market share, grew 40% year-over-year. In commercial cloud computing, one of the most important parts of CEO Satya Nadella’s turnaround plan, revenue grew 147%.

Wall Street, however, was largely unmoved by the numbers: Microsoft stock rose only 0.1% on Wednesday, closing at $44.87. Analysts were bullish going into the report; for example, Goldman Sachs analyst Heather Bellini wrote that Nadella was planning “exactly the type of reimagining that must occur for Microsoft to thrive in the mobile-first world.”

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Microsoft is at a turning point, with Nadella planning to reposition the company to become a leader in cloud computing. "Beyond back-end cloud infrastructure, our cloud will also enable richer employee experiences," Nadella wrote in a recent email to all Microsoft employees. The company’s passion, he wrote, is to “enable people to thrive in this mobile-first and cloud-first world.” This vision for Microsoft required a massive layoff of 18,000 employees, the largest in the company’s history.

Here’s what a few analysts on Wall Street had to say about the results.

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