Microsoft (MSFT) - Get Report shares fell Wednesday after the computer and software juggernaut posted quarterly earnings and sales that beat expectations for a ninth straight quarter yet still failed to impress investors and Wall Street analysts.
The company reported fiscal third-quarter earnings of $1.95 a share on revenue of $41.7 billion. That was better than what analysts polled by FactSet were expecting, which was earnings of $1.77 a share on revenue of $40.83 billion.
While it was a clean beat across the board, “expectations were just higher,” according to Jefferies analysts Brent Thill and Joseph Gallo, while BMO Capital Markets analyst Keith Bachman said the quarter was “good but not great.”
Jefferies’ Thill and Gallo wrote that while demand for Azure was impressive and there was “massive acceleration” in commercial bookings, the results still didn’t wow Wall Street. They held their buy rating on the stock with a one-year price target of $300.
Raymond James analyst Robert Majek noted “impressive” revenue growth, with the majority of the outperformance coming from gaming and Azure, adding that Microsoft “… remains a tough stock to bet against.” Still, he maintained his buy rating on the stock, though raised his price target to $290 from $275.
BMO’s Bachman left his outperform rating on Microsoft, though raised his one-year price target by $10 to $290, noting that despite the earnings beat, buy-side expectations were “probably higher.”
Among the more optimistic on Microsoft’s performance was Wedbush Securities’ Dan Ives, who called Microsoft’s earnings “another cloud masterpiece” amid “massive cloud momentum that is still in the early days of playing out” thanks to the "WFH" movement.
At last check, shares of Microsoft were down 3.05% at $253.99.