Microsoft Q3 Earnings Beats Street Expectation by Slight Margin

Microsoft Corporation’s MSFT third-quarter FY22 revenue was $49.4 billion, an increase of 18% year-over-year, above the consensus of $49.03 billion.
Net income improved by 8.2% to $16.73 billion, and EPS improved to $2.22 from $2.03 in 3Q21, beating the consensus of $2.18.
Revenue from Productivity and Business Processes was $15.8 billion (+17% Y/Y), Intelligent Cloud was $19.1 billion (+26% Y/Y), More Personal Computing was $14.5 billion (+11% Y/Y).
Office Commercial products and cloud services revenue increased 12% Y/Y, driven by Office 365 Commercial revenue growth of 17% Y/Y. LinkedIn revenue increased 34% Y/Y.
Windows OEM revenue increased 11% Y/Y, Windows Commercial products and cloud services revenue increased 14% Y/Y, and Search and news advertising revenue excluding traffic acquisition costs increased 23% Y/Y.
The operating income was $20.35 billion (+19.5% Y/Y) in the quarter, with a margin of 41.3%, up 40 bps.
Microsoft generated cash from operating activities year-to-date of $64.1 billion versus $54.03 billion in 2021.
Microsoft returned $12.4 billion to shareholders in the form of share repurchases and dividends in the quarter.
“Continued customer commitment to our cloud platform and strong sales execution drove better than expected commercial bookings growth of 28% and Microsoft Cloud revenue of $23.4 billion, up 32% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.
Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.
Price Action: MSFT shares are trading lower by 1.51% at $266.15 during the post-market session on Tuesday.

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