Microsoft Corp. (Nasdaq: MSFT) stock was flat in after-hours trading today (Tuesday) after the company reported earnings per share (EPS) of $0.55 and revenue of $23.38 billion.
Revenue beat expectations of $23 billion, but EPS missed analysts' estimates of $0.60 for the quarter. However, Microsoft attributed the earnings miss to its acquisition of Nokia Corp. (NYSE ADR: NOK), which the company said accounted for a loss of $0.08 per share.
For shareholders, one of the largest takeaways was the company's success in the cloud-computing industry.
"We are galvanized around our core as a productivity and platform company for the mobile-first and cloud-first world, and we are driving growth with disciplined decisions, bold innovation, and focused execution," Chief Executive Officer Satya Nadella said. "I'm proud that our aggressive move to the cloud is paying off - our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate."
The company also reported that revenue from its Devices and Consumer segment grew 42% to $10 billion, and that revenue from its Commercial segment grew 11% to $13.48 billion.
For the full fiscal year 2014, MSFT reported GAAP revenue of $86.8 billion. That was a near 12% increase from 2013's total of $77.8 billion.
Microsoft NASDAQ: MSFT Jul 22 04:01 PM loading chart... loading chart... loading chart... loading chart... loading chart... loading chart... loading chart...- Last price44.83Prev Close44.84
- Change-0.01% Change-0.0%
- Open44.56Volume15,018,232
- Day Low44.63Day High45.13
- Bid44.80Ask44.97
- 52 Wk Low30.4752 Wk High44.84
- Market Cap272,306ExchangeNASDAQ
Nadella made headlines last week when he announced that Microsoft would be laying off approximately 18,000 employees, or 14% of the company's workforce. That news sent shares to a 52-week high of $45.15.
And while Microsoft's revenue totals from today should send the stock higher in the short term, there are numerous other catalysts that are really driving MSFT stock higher.
Bullish Catalysts Driving MSFT Stock Now"Most investors have written this company off - or have forgotten about it altogether," Money Morning's Defense and Tech Specialist Michael Robinson said. "I think Microsoft is going to show us something very special. The stock is up nearly 20% this year; it has a $50 billion cash hoard, and a committed dividend policy. It has a new CEO. And it just spent $7 billion in a big buyout. It's the kind of corporate turnaround play that I just love."
According to Money Morning's Executive Editor Bill Patalon, there are four major catalysts driving MSFT stock now...
One huge one is new CEO Satya Nadella.
"Satya Nadella is in the CEO office and is firmly in charge, setting the new tone and company direction, and announcing a massive layoff last week," Patalon said.
When Nadella made his major layoff announcement last Thursday, MSFT soared to a 52-week high, and the stock has traded just below those levels since.
According to Robinson, however, MSFT stock has a lot of room to grow.
"If Microsoft's shares just got back to their late-1990s highs in the neighborhood of about $60, we'd be looking at a profit of 44% from current levels," Robinson said. "I think these are the minimum gains we can expect to see. Given Nadella's aggressive plans for mobile and cloud computing, all that cash, and the other catalysts, I believe that Microsoft will continue to earn double the market returns over the next few years. This leader-turned-laggard has become a leader again."
There are three more major catalysts driving MSFT stock higher. We are going to detail them for Members tomorrow - stop back for the full story.
Keep up to date on all the important releases this earnings season with Money Morning's Q2 earnings calendar...
Tags: Microsoft earnings, microsoft stock, MSFT, msft earnings, msft stock, Nasdaq: MSFTThe post The Bullish Catalysts Driving Microsoft (Nasdaq: MSFT) Stock Following Today's Earnings appeared first on Money Morning - Only the News You Can Profit From.
