Microsoft Q1 Earnings and Revenue Top Estimates

Microsoft (MSFT) delivered better-than-expected Fiscal Q1 2022 results for the period ended September 30, 2021. Revenue and earnings came in above consensus estimates driven by solid growth in the Cloud division. MSFT shares rose 0.64% to close at $310.11 on October 26.

Microsoft is a U.S. company that develops, licenses, and supports software services, devices, and solutions. It operates under three business units: Productivity and Business, Intelligent Cloud, and Personal Computing.

Revenue in Q1 was up 22% year-over-year to $45.3 billion, exceeding consensus estimates of $43.97 billion. Revenue in the Productivity and Businesses Processes segment was up 22% year-over-year to $15 billion, and the Intelligent Cloud unit delivered $17 billion in revenue, up 31% year-over-year. Sales in the Personal Computing segment were up 12% year-over-year to $13.3 billion.

Consequently, operating income landed at $20.2 billion, up 27% compared to the same quarter last year. GAAP Net income increased 48% year-over-year to $20.5 billion. GAAP Diluted EPS increased 49% compared to the same quarter last year to $2.71, exceeding analysts’ estimates of $2.07.

During the quarter, Microsoft returned $10.9 billion to shareholders through stock buybacks and dividends, an increase of 14% compared to the same quarter of the last fiscal year. (See Top Smart Score Stocks on TipRanks)

Meanwhile, Wedbush analyst Daniel Ives has reiterated a Buy rating on the stock with a $375 price target, implying 20.92% upside potential to current levels. According to the analyst, Microsoft continues to see robust growth as more enterprises move to the cloud. Ives believes Microsoft Azure’s cloud momentum is still in the “early days of playing out.”

Consensus among analysts is a Strong Buy based on 20 Buys. The average Microsoft price target of $342.40 implies 10.41% upside potential to current levels.

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