Microsoft Gains Big On Earnings
Microsoft (MSFT) is a company that, like most companies, has seen some struggles this year. However, Friday proved to be an overwhelmingly positive day for the stock after the company reported earnings for the first fiscal quarter of 2017 on Thursday. Today, we'll talk about what we saw from earnings, how the stock reacted to the news, and what binary options traders should be watching when trading the stock ahead.
Microsoft Reports Strong Earnings
As mentioned above, Microsoft had an incredibly strong day in the market on Friday after reporting earnings for the first fiscal quarter of the year 2017. Here's what we saw from the report…
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Earnings Per Share – In terms of earnings per share, Microsoft definitely did not disappoint investors. During the quarter, analysts expected that the company would generate earnings in the amount of $0.68 per share. However, the company actually reported that it earned $0.76 per share in the quarter.
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Revenue – In terms of revenue, Microsoft reported a relatively mixed bit of data. During the quarter, analysts expected that the company would report revenue in the amount of $21.7 billion. However, the company actually reported that its revenue for the quarter came in at $22.3 billion. It proved to be slight growth over last year's total for the quarter of $21.6 billion.
Following the release of earnings, Ritholtz Wealth Management CEO, Josh Brown, offered an explanation with regard to why there is an “instructive lesson” that investors can take from this report. Here's what he had to offer…
“That lesson is this: companies will stumble when they're in innovative industries and when competition is fierce. It's almost a guarantee. But, when you're a company like Microsoft with $30-$40 billion just sitting in cash, it gives you plenty of time to figure it out…”
How The Stock Reacted To The News
As binary options traders, one of the first things that we learn is that the news moves the market. Any time positive news is released surrounding a publicly traded company, we can expect to see gains in the value of the stock as a result. Adversely, negative news will generally lead to declines. In this particular case, the news surrounding Microsoft was overwhelmingly positive. After all, investors love strong earnings. As a result, the stock had an incredibly strong day in the market on Friday. By the end of the trading session, Microsoft grew $2.41 per share or 4.21% to close the day off at $59.66 per share. In after hours trading, we're seeing relatively flat movement.
What Binary Options Traders Should Be Watching Ahead
When it comes to Microsoft, we're looking at an asset that will likely present several opportunities for binary options traders. With that said, there are a couple of factors you'll want to watch closely when trading the stock. First off, as always, any press releases can cause big movement. Considering that we're getting into the holiday season, we're likely to see a few releases coming down the line. Also, keep a close eye on economic developments in the coming month. With Microsoft making its money through technology, the holiday season comes with increased sales. However, economic conditions will likely dictate how much money consumers will spend during this season. So, economic developments could cause quite a bit of movement. Finally, keep a close eye on the company's cloud computing sector. This sector played a key role in the strong quarter and movement in the sector will likely lead to further movement ahead.
Disclosure: None.
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