Microsoft stock rose as much as 4 percent above the $102.32 closing price on Wednesday after the company reported better-than-expected earnings for its fiscal first quarter.
Here are the key numbers:
- Earnings: $1.14 per share, excluding certain items, vs. $0.96 per share as expected by analysts, according to Refinitiv.
- Revenue: $29.08 billion, vs. $27.90 billion as expected by analysts, according to Refinitiv.
The stock lost some of its post-earnings gain after Microsoft presented guidance for the fiscal second quarter. Microsoft chief financial officer Amy Hood told analysts on Wednesday's earnings call that the company expects $31.9 billion to $32.7 billion in revenue in the fiscal second quarter, including a contribution from GitHub, an acquisition that has not closed yet. Analysts had been expecting a total of $32.25 billion in revenue, according to Refinitiv.
Microsoft's revenue rose 19 percent year over year overall in the fiscal first quarter, according to a statement. Analysts polled by Refinitiv had been modeling 13.7 percent growth -- just under the 14 percent growth Microsoft had across its entire 2018 fiscal year.
Microsoft continues to emphasize the growth from its business-focused cloud services, which are tracked under the Commercial Cloud revenue metric. The company is challenging public cloud market leader Amazon Web Services with its Azure business, adding business users for its Office 365 cloud productivity app portfolio that competes with Alphabet's Google G Suite and seeking to take market share from Salesforce with its Dynamics 365 software.
What's different now is that Microsoft is starting to include commercial LinkedIn revenue, which includes products like LinkedIn Recruiter, in the Commercial Cloud tally. In a presentation to investors last month, Microsoft showed how adding commercial LinkedIn to Commercial Cloud revenue for the 2018 fiscal year would bump up the total by about $3.4 billion, reflecting an increase approaching 15 percent.
Commercial Cloud ultimately came in at $8.5 billion, up 47 percent year over year. Syed Talha Saleem, equity research associate at Credit Suisse, told CNBC in an email that he was expecting Commercial Cloud to hit $8.3 billion in revenue.
Azure's revenue was up 76 percent, slipping from 89 percent growth one quarter ago. The Azure performance was in line with Microsoft's expectations, Microsoft chief financial officer Amy Hood said on a conference call with analysts after the earnings release.