Microsoft closes out its fiscal 2016 with strong cloud growth

Microsoft released its financial results for its fiscal Q4 and its entire fiscal 2016 today. The company took in $20.6 billion in revenue and made $3.1 billion in operating income. While Microsoft earned 7% more revenue in the year-ago quarter, it also posted a $2 billion operating loss, so the return to profitability is welcome. Here's a quick tabulation of the company's results compared to a year ago:

  Q4 FY 2016 Q4 FY 2015 Change
Revenue $20.6 billion $22.2 billion down 7%
Operating income $3.1 billion -$2 billion
Net income $3.1 billion -$3.2 billion

The More Personal Computing division (responsible for Windows and Surface devices) took in $8.9 billion in revenue, down 4% from a year ago. The company reported a surprising 27% increase in Windows OEM revenue for non-Pro licenses. The company's Surface Pro 4 and Surface Book helped that business grow 9%. Phone revenue was bleak—Microsoft recorded a 71% revenue decline from that business compared to a year ago.

The company's Intelligent Cloud division took in $6.7 billion, a 7% increase from a year ago. Microsoft more than doubled its Azure cloud revenue, and it says it has more than twice as many Azure compute resources in use compared to a year ago.

Productivity and Business raked in $7 billion, 5% more than a year ago. Microsoft cites Office 365 business client growth of 54% and consumer growth of 19% as part of the reason for the change.

For its fiscal 2016, Microsoft earned $85.3 billion in revenue, down 9% from its fiscal 2015, and made $28.2 billion in operating income, up 7% from last year. The company will provide guidance on its next quarter on its earnings webcast at 5:30 PM ET.

Comments closed
    • blastdoor
    • 3 years ago

    MSFT has a trailing P/E of 40 while AAPL is 11.

    In theory, this means that the collective wisdom of all stock investors is that Microsoft will be growing profits much faster than Apple over the next couple of years.

    I have to say — it’s hard for me to see how that’s going to be the case. My guess is that both are going to be fairly stagnant for the next couple of years. I think both should be more in the range of 15 to 20 with respect to P/E. But who am I to argue with the collective wisdom of the holy market?

      • Concupiscence
      • 3 years ago

      15 to 20 sounds totally reasonable for both. Alas, the raw P/E numbers notwithstanding the market isn’t fully rational. AAPL’s been slapped with an unsexy perception, and aren’t perceived as aggressively innovating the way they did in their prime. Try as they might, and as much money as they make, they’ve never been able to shake off the post-Jobs funk.

      On the other hand, Microsoft seems to have irrational, buoyant optimism attached to them since the Board finally removed Ballmer from his post. I don’t buy into it because the company seems to flail in a lot of the same ways as before, but time will tell whether Nadella can steer such a huge, inertia-carrying pile of internecine warfare in a direction that’s constructive.

    • Sam125
    • 3 years ago

    Not to try to sound condescending but if you’re having trouble with the math on income when it goes from negative to positive, simply take the absolute difference to calculate the percentage change. So for example, operating income would be ABS(-2 BB – 3.1 BB) = 5.1 BB divided by 3.1 BB – 1 : Will yield your percentage change from Y2Y.

      • Jeff Kampman
      • 3 years ago

      [url<]http://mathforum.org/library/drmath/view/55720.html[/url<]

        • Sam125
        • 3 years ago

        Um no, I believe many financial analysts would highly disagree about his position on percentage change. At least if you’re a shareholder in anything, anyway. Being off by on EPS has a rather dramatic effect on stock price and being even a few pennies off can cause a rally or suddenly turn bearish.

        Of course none of this matters on the FOReign EXchange market, but people who make a living off of those markets are all outcasts of society anyway.

          • Sam125
          • 3 years ago

          I should note that I do enjoy trading on FOREX as a hobby though. Especially the EUR/USD which is very technical and the AUS/USD if you’re good at carry trading.

      • MarkG509
      • 3 years ago

      Just be happy it wasn’t another loss. I am.

      • Sam125
      • 3 years ago

      I have some shares with Bank of America but I’m not invested in anything tech. My hope has always been on the strength of our banks.

        • Sam125
        • 3 years ago

        Wow, who would downrank me for saying I have shares in Bank of America and believing in the US banking system!?!?

          • albundy
          • 3 years ago

          because nobody believes in the US banking system anymore after they ruined the worlds economy for years to come with no accountability?

            • Sam125
            • 3 years ago

            Check out the share price of Fifth Third Bancorp (NASDAQ: FITB). Their stock dipped below $1.00 several times during the collapse back in 2008, now look where they are. If that’s not strength in the US Banking System, then there isn’t a strong bank on Earth. I bought what I thought were the most American bank which would obviously be Bank of America (NYSE: BAC). I’m poised to sell some shares though after the latest rally subsides. It’s been rising after going through a Bollinger squeeze.

            • Sargent Duck
            • 3 years ago

            If you want to believe in a banking system, I’d highly suggest you research the Canadian banking system. A much better system. The American system scares me…

            • Sam125
            • 3 years ago

            US Banking is still much stronger when it comes to strength of the currency, total capital in circulation, acceptability around the world, reserve strength, ease of accessibility and many more pros for the US Banking System. If all you care about is keeping your money in a safe place and that the bank won’t cheat you out of your money then yeah, Canada’s system is safer, but the US equivalent would banking at a Credit Union or a safe bank like Western Union. If you’re a hardcore capitalist like me, the US System provides near limitless opportunities to generate wealth both for myself and for the good people.

            Plus since it’ll be the US having a direct hand in creating the next financial hub and banking center of the world (Location: Confidential), the US will have the most say in how that hub will be shaped.

            • sweatshopking
            • 3 years ago

            Canada’s system is [i<] perceived [/i<] safer. We are heading towards catastrophe.

            • Sam125
            • 3 years ago

            Why? What do you think Trudeau is doing wrong with regard to finance and banking?

            • sweatshopking
            • 3 years ago

            Trudeau? The only thing id like him to do is fix his fathers mistake: Bring the public bank of Canada back to its public roots and stop it acting like it’s a private bank like the fed or bank of England. Loan to governments at 0% interest as it did for the majority of its existence which helped our national debt levels stay extremely low.

            The issue is just a ridiculous market with interest rates too low, poor real estate management, and lackluster banking regulation. Vancouver is now the second most expensive city on earth. Only Hong Kong is more expensive. Toronto is heading there. Need to reel in the banks and slow down the market. Not an issue for trudeau though.

            • Sam125
            • 3 years ago

            Well that’s quite a tall order there but what you seem to be saying is that you want banks to be regulated more by the people yet have the government make popular things and spots cheap. I don’t think that’s possible, dude.

            • sweatshopking
            • 3 years ago

            Costs aren’t an issue for me personally. I live on the east coast. Housing is relatively affordable. And yes, regulation would make spots cheap.

            • trackerben
            • 3 years ago

            [url<]http://www.timesofisrael.com/global-banks-intel-join-israels-fintech-scene/[/url<]

            • sweatshopking
            • 3 years ago

            Nvm

            • Sam125
            • 3 years ago

            You live in the UK or something? LoL

            • trackerben
            • 3 years ago

            No, just wanted your response

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