Microsoft: Color on qtr
* FBR notes MSFT delivered a solid FY2Q (Dec) as the Co beat the Street across the board on both the top and bottom lines. The source of strength for Microsoft continues to be around the co's success in the cloud on the heels of Azure and Office 365 momentum in the field, with Surface and Xbox also seeing relative strength in the December quarter due to a new product cycle for both (e.g., Xbox One, Surface 2). Although PC headwinds remain a major challenge for Microsoft going forward, FBR applauds the company's ability to show better-than-expected Windows OEM revenues in the company's "bread and butter" PC business, an encouraging sign in its opinion. Tgt to $40 from $38.
* RBC notes MSFT reported a strong second quarter outperforming most metrics with record revenue driven by a successful holiday season for Xbox and Surface coupled with in-line Commercial results. Q3/14 revenue and EPS guidance was lower then expected, but could prove conservative with an improving economy.
* Oppenheimer notes, building on the prior encouraging quarter, MSFT reported strong F2Q14 results that exceeded consensus estimates on almost every metric and were further supported by a solid outlook. The strong performance was driven by: 1) improved macro environment; 2) stabilizing PC market; 3) improved execution internally and at MSFT's partners ecosystem; 4) both Commercial and Consumer segments performing well. There was no new message about the CEO selection process and Opco views it as the next near-term catalyst. With back-to-back strong quarters and encouraging outlook, MSFT could be indirectly suggesting there is no need for an external change. It remains to be seen.
Pac Crest notes, while Microsoft put up strong FQ2 (Dec.) upside, it was mostly as a result of better tablet and Xbox sales. There is still a lot of uncertainty in the Microsoft model, so firm is lowering estimates for FQ3 modestly.