Microsoft Corporation (MSFT) Stock Price Jumps After Q1 Earnings Beat Street

Microsoft Corporation (NASDAQ:MSFT) shares rallied more than 3 percent on Thursday in extended-hours trading after the world's largest software company beat expectations and tallied record first-quarter sales, driven by the company’s cloud strength and hardware progress.

The Seattle-based company turned in a fiscal first-quarter profit of $4.54 billion, or 54 cents per share, on revenue of $23.2 billion, compared with earnings of $5.24 billion, or 64 cents per share, on revenue of $18.53 billion a year earlier.

Wall Street had expected the software giant to report a profit of $4.08 billion, or 49 cents a share, excluding items, on revenue of $22.01 billion, according to analysts polled by Reuters.

“We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,” CEO Satya Nadella said in the earnings report.

During the period ended Sept. 30, Microsoft said strong performance across commercial and consumer segments drove revenue growth. Revenue from the company’s Devices and Consumer unit grew 47 percent to $10.96 billion, and Microsoft’s Commercial revenue grew 10 percent to $12.28 billion.

“We delivered a strong start to the year, with continued cloud momentum and meaningful progress across our device businesses,” said Amy Hood, executive vice president and chief financial officer.

Investors are now looking ahead to Microsoft’s earnings call with shareholders at 5:30 p.m. EDT, where analysts will be eyeing three key areas: the cloud, the future of mobile, including the Nokia Devices and Services business, and the outlook for Microsoft’s Windows operating system.

“The biggest challenge for Microsoft is turning around the Nokia and mobile business in the right direction as this remains an overhang on the name and a barrier to penetrating the golden goose of consumer spending,” said Daniel Ives, an analyst at FBR Capital Markets & Co.

Microsoft said it will provide forward-looking guidance with this quarterly earnings announcement on its earnings conference call and webcast.

Following the report, shares of Microsoft jumped more than 3 percent Thursday to $46.40 in after-hours trading.