Microsoft beats Q4 2019 estimates on continued Azure, Productivity growth

Microsoft reported revenue of $33.7 billion and operating income of $12.4 billion for its fourth quarter of 2019. Diluted earnings per share was $1.71 GAAP.

The company beat the consensus EPS estimate of $1.21 and the consensus Revenue Estimate of $32.8 billion.

Revenue in Productivity and Business Processes was $11.0 billion and increased 14%, with Dynamics products and cloud services revenue increased 12% driven by Dynamics 365 revenue growth of 45%. LinkedIn revenue was up 25% with sessions growth of 22%. Microsoft credited Office 365 and LinkedIn for driving the segment's revenue growth.

Those numbers are slightly up from Q3 2019, when revenue in Productivity and Business Processes was $10.2 billion. In Q3, Dynamics products and cloud services revenue increased 13%, on Dynamics 365 revenue growth of 43%.

Azure saw revenues climb 64% in Q4 as the  Intelligent Cloud segment's overall revenue was $11.4 billion, an increase of 19%.

Regarding Microsoft's cloud positioning, John Dinsdale, Chief Analyst & Research Director Synergy Research Group, states: "Microsoft is a clear number two in cloud infrastructure services (IaaS, PaaS, hosted private cloud), still a long way behind AWS but well ahead of the rest of the pack. Its revenue growth rate is way above the overall market growth rate, so it is gradually gaining market share – 9% in 2016, 11% in 2017, 14% in 2018 and 16% in the first quarter of 2019."

The full fiscal 2019 saw Microsoft deliver revenue of $125.8 billion, operating income of $43.0 billion, and earnings per share of $5.06 GAAP.