The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Microsoft met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and earnings per share expanded slightly.
Margins dropped across the board.
Microsoft chalked up revenue of $20.9 billion. The 25 analysts polled by S&P Capital IQ expected sales of $20.9 billion. Sales were 4.7% higher than the prior-year quarter's $20.0 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $0.78. The 27 earnings estimates compiled by S&P Capital IQ forecast $0.76 per share. GAAP EPS of $0.78 for Q2 were 1.3% higher than the prior-year quarter's $0.77 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 73.0%, 280 basis points worse than the prior-year quarter. Operating margin was 38.3%, 260 basis points worse than the prior-year quarter. Net margin was 31.7%, 150 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $17.5 billion. On the bottom line, the average EPS estimate is $0.61.
Next year's average estimate for revenue is $74.3 billion. The average EPS estimate is $2.72.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 13,478 members out of 15,455 rating the stock outperform, and 1,979 members rating it underperform. Among 3,057 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 2,778 give Microsoft a green thumbs-up, and 279 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Microsoft is outperform, with an average price target of $31.00.
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