What happened
Even with the market turmoil towards the end of the year, shares of Microsoft (NASDAQ: MSFT) generated an 18.7% return to shareholders last year, according to data provided by S&P Global Market Intelligence . The software giant continued to make progress in its transformation into a subscription and service-based business, which led to an impressive acceleration in revenue growth last year.
So what
Total turnover achieved $ 110 billion for fiscal 2018 (ending June), up 14% from the previous year. Strong revenue growth fueled an 18% year-over-year growth in adjusted earnings per share.
Windows 10 S for schools. IMAGE SOURCE: MICROSOFT.
The results come as Microsoft experiences impressive growth in its Azure cloud business, which grew 76% year-over-year in the first fiscal quarter ending in September. Microsoft is now the second largest cloud provider in the world.
Meanwhile, other areas of the business are also performing well. The Productivity and Business Processes division increased its revenue by 19% in the first fiscal quarter, thanks to the growth in the number of subscribers to Office 365, as well as a sharp increase of 33% in revenue from LinkedIn .
The more personal computing segment, which grew 15% year-over-year, was the main contributor to last quarter revenue, driven by growth in Windows (up 12%), games (up 44%), search advertising (up 17%) and Surface devices. (up 14%).
Overall, Microsoft looks solid. Total income 19% growth Year-over-year, the first quarter of fiscal 2019 represented an acceleration from the 12% growth rate in the previous year’s quarter. Given the momentum, it’s clear why the stock climbed 18% last year.
Now what
Microsoft’s rise in the cloud computing industry and its continued strength in core businesses, such as office software and games, suggests the software giant is finding its second wind after experiencing slower growth there. a few years ago. And even after last year’s price gains, the stock still looks like a buy, trading for a futures price-to-earnings ratio of 20 times next year’s earnings estimates. This is an attractive valuation for a company that is expected to increase profits by 13% per year over the next five years.
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Teresa Kersten, an employee of LinkedIn, a subsidiary of Microsoft, is a member of the board of directors of The Motley Fool. Jean Ballard has no position in any of the stocks mentioned. The Motley Fool owns shares of Microsoft. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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