Microsoft tops $1 trillion after strong Q3 earnings, cloud growth forecast

Company News

Microsoft Corp on Wednesday briefly topped $1 trillion in value for the first time after executives predicted continued growth for its cloud computing business.

The Redmond, Washington-based company beat Wall Street estimates for quarterly profit and revenue, powered by an unexpected boost in Windows revenue and brisk growth in its cloud business which has reached tens of billions of dollars in sales.

Microsoft shares rose 4.4 per cent to $130.54 in late trading after the forecast issued on a conference call with investors, pushing the company ahead of Apple Inc's $980 billion market capitalisation. The companies and Amazon.com Inc have taken turns in recent months to rank as the world's most valuable US-listed company.

Microsoft's stock has gained about 23 per cent gain so far this year, after hitting a record high of $125.85 during regular trading hours.

Under Chief Executive Satya Nadella, the company has spent the past five years shifting from reliance on its once-dominant Windows operating system to selling cloud-based services.
Azure, Microsoft's flagship cloud product, competes with market leader Amazon Web Services (AWS) to provide computing power to businesses.

Chief Financial Officer Amy Hood told investors that Microsoft expects to see growth in the fiscal fourth quarter in the business divisions in charge of Azure and Office 365, an online version of its longtime productivity software.


 For the third quarter ended March 31, Azure's growth slowed slightly to 73 per cent, down from 76 per cent in the second quarter. Mike Spencer, Microsoft's head of investor relations, said the decline was roughly in line with the company's estimate...Read More

Facebook beats profit estimates, sets aside $3 billion for privacy penalty

Company News

Facebook Inc on Wednesday blew past Wall Street profit estimates in the first quarter and set aside $3 billion to cover a settlement with U.S. regulators, calming investors who had worried about the outcome of a months-long federal probe.

Shares of the world's biggest online social network jumped more than 10 percent to $200.50 in after-hours trade. They have now regained much of the ground lost last year amid slowing growth and costs associated with the company's privacy scandals.

The settlement accrual, which Facebook set at $3 billion but said could rise as high as $5 billion, cut the company's net income in the first quarter to $2.43 billion, or 85 cents per share.

Excluding the charge, Facebook would have earned $1.89 a share, up from $1.69 in the year-ago quarter and easily beating analysts' average estimate of $1.63 per share, according to IBES data from Refinitiv.

Total first-quarter revenue rose 26 percent to $15.1 billion from $12.0 billion last year, again beating analysts' average estimate of $15.0 billion.

"This is a strong report suggesting that advertisers still see value in Facebook's platform, as they did before the controversies and scandals erupted," said Haris Anwar, senior analyst at financial markets platform Investing.com.


 Monthly and daily users of the main Facebook app were both up 8 percent compared to last year, to 2.4 billion and 1.6 billion, respectively, in line with forecasts.Total expenses in the first quarter were $11.8 billion, including the settlement accrual, up 80 percent compared with a year ago as the company hired content moderators and invested in new security controls to make its social networks safer...Read More