Microsoft Falls As Results Fail to Sustain Lofty Valuation

imageStock Markets42 minutes ago (Apr 28, 2021 08:14AM ET)

(C) Reuters.

By Dhirendra Tripathi – Microsoft (NASDAQ:MSFT) shares were trading weaker in Wednesday’s premarket a day after the company’s March quarter results, which many found underwhelming.

The stock has risen over 70% since the pandemic started, despite already having a valuation over $1 trillion. At Monday’s close, it traded at over 35 times 2020 earnings, a multiple more usually associated with small, fast-growing startups.

The results nonetheless showed growth across all the company’s segments including its Windows platform, cloud services, LinkedIn, XBox, Search and Surface.

The results came on a day when Alphabet (NASDAQ:GOOGL), some of whose businesses rival Microsoft’s, posted a 34% gain in revenue to $55.31 billion, due largely to an advertising business that Microsoft doesn’t boast. Microsoft revenue was $41.7 billion in the quarter through March and increased 19% from the same period a year ago. Xbox revenue growth at 34% shone through.

Net income was $15.5 billion, higher by 44%. Diluted earnings per share were $2.03, rising 45%.

LinkedIn revenues rose 25% in the quarter. For the full year, advertising revenues at the online job and social media platform for professionals topped $3 billion.

Server products and cloud services revenues rose 26% during the quarter, driven by 50% growth in revenue at Azure.

Microsoft Falls As Results Fail to Sustain Lofty Valuation

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