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.”
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.