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“Priced To Perfection” Microsoft Smashes Expectations, But Shares Barely Budge

Yesterday, Bank of America said that Q3 earnings season “smacks” of the tech bubble because just like in Q1 2000, when companies beat top and bottom line expectations, their stock was not rewarded and in fact, was penalized as all the good (great) news had already been penalized.

Moments ago we got a vivid example of just that when Microsoft reported Q3 earnings which blew away expectations, and the stock first spiked but then… dropped

Here is how Microsoft beat expectations across the board for Q3, on both the top and bottom line:

  • Revenue of $37.15 billion, smashing the consensus estimate $35.75 billion, and beating the highest sellside foecast of $36.40 billion
  • EPS $1.82, also beating both the estimate of $1.55, and the highest forecast of $1.61, and well above the $1.38 reported last year.
  • Intelligent Cloud revenue $12.99 billion, +20% y/y, estimate $12.78 billion
  • Productivity and Business Processes revenue $12.32 billion, +11% y/y, estimate $11.85 billion
  • More Personal Computing revenue $11.85 billion, +6.4% y/y, estimate $11.27 billion

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