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April 25, 2019, 9:53 a.m. EDT

Microsoft touches $1 trillion valuation after earnings

Microsoft could become second U.S. public company to hit the mark after Apple

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By Wallace Witkowski, MarketWatch

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Microsoft Corp. shares briefly crossed the level they would need to reach a $1 trillion valuation in Thursday morning trading, following a strong quarter for the company’s cloud business. Microsoft needs to close with a share price of at least $130.50 for a market capitalization of $1 trillion, and it hit a high of $131.37 in the first few minutes of trading before falling back below the mark.

Microsoft /zigman2/quotes/207732364/composite MSFT -0.16%  shares were recently up 3.7% in morning trading, after rising as much as 5.1% earlier in the session.

Apple Inc. /zigman2/quotes/202934861/composite AAPL +0.36%  is the only public U.S. company to record an official $1 trillion valuation, and has been nearing that mark again of late. It has a current market cap of $976 billion, according to FactSet. Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +2.11%  briefly crossed the mark in a single trading session last September, but has never closed a trading session at that level. Amazon has a market cap of $943 billion, according to FactSet.

/zigman2/quotes/207732364/composite MSFT 212.94, -0.35, -0.16%

Microsoft’s gains followed a fiscal third-quarter earnings report that included an outlook range that bookended Wall Street estimates while topping the analyst consensus for the quarter, led by strong gains in its cloud services. The company reported fiscal third-quarter net income of $8.81 billion, or $1.14 a share, compared with $7.42 billion, or 95 cents a share, in the year-ago period. Revenue rose to $30.57 billion from $26.82 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of $1 a share on revenue of $29.88 billion.

“Demand for our cloud offerings drove commercial cloud revenue to $9.6 billion this quarter, up 41% year-over-year,” Amy Hood, Microsoft’s chief financial officer, said in a statement. “We continue to drive growth in revenue and operating income with consistent execution from our sales teams and partners and targeted strategic investments.”

On the conference call, Hood said the company expects $10.55 billion to $10.75 billion in productivity and business processes in the fourth quarter. Analysts polled by FactSet expect $10.67 billion. Intelligent cloud is forecast to bring in $10.85 billion to $11.05 billion, Hood said. Analysts expect $10.94 billion. PC revenue is expected to bring in $10.8 billion to $11.1 billion in the fourth quarter, while analysts expect $10.96 billion.

For the third quarter, Azure revenue rose 73%, Dynamics 365 sales rose 43%, Office 365 Commercial sales rose 30%, and Xbox software and gaming services revenue rose 12% from the year-ago period.

US : U.S.: Nasdaq
$ 212.94
-0.35 -0.16%
Volume: 28.80M
Aug. 5, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$1614.10 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 440.25
+1.59 +0.36%
Volume: 30.44M
Aug. 5, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$1875.55 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 3,205.03
+66.20 +2.11%
Volume: 3.91M
Aug. 5, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$1572.21 billion
Rev. per Employee

Wallace Witkowski is a MarketWatch news editor in San Francisco. Follow him on Twitter @wmwitkowski.

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