Microsoft Corporation

 

No, Microsoft is not just the maker of Windows and Office that you know.  Microsoft provides various services to business including Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), as well as being one of the largest providers of cloud-based services and solutions. 

 

Ests:    1Q18   2Q18   FY18    FY19

Revs    24.13   28.34   104.6   112.6

Ests:    .78       .86       3.24     3.63

 

Div=1.56, yield=2.1%, s/o=7.72bn, P=73.92, TTM EPS=3.08, 24X TTM EPS, 21X FY18 EPS

133bn in gross cash+inv, 46.8bn net of debt, 2.3bn net of def revs or 0.30/sh

 

4Q .75 vs .69 ex .23 tax benefit, est .71 up from .68

  • Revs +9% to 24.7bn, OM 28.4% vs 27.5%, OpInc +13%
  • Productivity and Business +21% to 8.4bn, Office commercial +5% with Office 365 +43%, Office consumer +13%, Dynamics and cloud services +7% with Dynamics 365 +74%
  • Intelligent Cloud +11% to 7.4bn, Server and cloud services +15% with Azure +97%, Enterprise services -3%
  • More Personal Computing -2% to 8.8bn due to lower phone revs, Windows OEM +1%, Windows commercial +8%, Surface -2%, Search +10%, Gaming +3%
  • Closed highest number of multi-million dollar Azure deals to date, Commercial bookings +30%, commercial unearned revs reached 27.8bn, significantly higher than expected (should contribute to acceleration in the future), contracted but not billed revenues now >31.5bn
  • Commercial cloud annualized run rate >18.9bn, +56%
  • Decent quarter and we should see revenues and profitability accelerate once they lap the phone business but the stock is looking a bit on the rich side, I’m not at the stage of saying I prefer cash to the stock but this might be a candidate to look at opportunity costs.

3Q 17 .73 vs .63 , est .70

  • Revs +6% to 23.6bn, OpInc +2% to 7.1bn
  • Productivity and Business +22% to 8bn, Office commercial +7% driven by Office 365 +45% (I’m an Office 365 subscriber and I LOVE it, great support for small business), now over 100m users, Office consumer +15% with 26.2m Office 365 customers, Dynamics and cloud services +10%,
  • Intelligent cloud +11% to 6.8bn, Server and cloud services +15% driven by Azure +93%, Enterprise services -1%, seeing success in upselling higher valued premium services.
  • More Personal Computing -7% to 8.8bn, Windows OEM +5%, Windows commercial +6%, Surface -26%, Search +8%, Gaming +4%
  • Deferred revenue 35.7bn, +38% y/y
  • Solid quarter, slight EPS beat, not exactly cheap but growth supports the valuation.