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Microsoft Crushes Earnings, MSFT Stock Pops

By U.S. News & World Report

Software giant Microsoft Corp. (ticker: MSFT) easily beat analysts estimates in its fiscal fourth-quarter earnings report Tuesday afternoon, wrapping up a year that saw the company make its biggest deal ever when it purchased LinkedIn Corp. (LNKD), the leading social network for professionals, for $26.2 billion in an all-cash deal.

The LinkedIn deal was easily the news of the quarter for Microsoft, but on Tuesday, the company’s core business was in focus — and the core business is doing quite well. Redmond, Washington-based Microsoft beat on earnings, although revenue fell year-over-year.

MSFT stock posted adjusted earnings per share of 69 cents on adjusted revenue of $22.64 billion. Analysts were expecting earnings per share of 58 cents on revenue of $22.14 billion. In the year-ago period, MSFT earned 60 cents per share on revenue of $22.18 billion. Shares quickly advanced more than 3 percent on the news.

Before Tuesday afternoon’s report, MSFT stock was down about 4.3 percent on the year.

[See: The 10 Best Ways to Buy Tech Stocks.]

Microsoft returned $6.4 billion to shareholders last quarter through dividends and buybacks.

The Windows operating system remains the company’s most significant cash cow. Although Microsoft recently said its goal of 1 billion monthly active Windows 10 users wouldn’t be achieved by the 2018 fiscal year, the operating system still has over 350 million users and counting.

That said, Microsoft is still in a hurry to diversify away from Windows as the personal computing market continues to stagnate. Its decision to morph Microsoft Office into a subscription-based cloud offering with Office 365 has been widely hailed as a savvy move that generates a more consistent stream of recurring revenue. “Office 365, the web-based version of Office, increased by 5 percent, has been adopted at a faster pace than before. This is because users pay less licensing fees to adopt in the front end, compared with the traditional Office versions,” says K C Ma, a finance professor at Stetson University.

[Read: How to Choose the Best Dividend Stocks.]

Microsoft Azure, the company’s corporate-facing cloud computing service, has been a point of pride for Microsoft and one of the areas the company has been looking to for growth. Although it currently plays second-fiddle to Amazon.com’s (AMZN) Amazon Web Services, Azure revenue soared 120 percent in the fiscal third quarter and posted 102 percent revenue growth in the most recent quarter. Ma notes that this is better than the 95 percent consensus and that “Microsoft is being rewarded for its many years’ strategic move away from the conventional software sales into the cloud business of the future.”

Since taking over in 2014, CEO Satya Nadella has been refocusing Microsoft on the cloud, a sharp change in strategy following the decade-plus reign of former CEO Steve Ballmer. Ballmer oversaw a period where Microsoft missed out on the mobile and tablet megatrends that helped make Microsoft rival Apple (AAPL) the largest company in the world.

Part of Microsoft’s transformation has been its pivot away from the PC market, where the relative success of its Surface tablets is an important part of the strategy. Surface revenue grew 9 percent in the fourth quarter.

[See: 8 Tech Funds to Buy to Invest in the Future.]

Microsoft’s report follows tech darling Netflix’s (NFLX) disappointing earnings report Monday, which sent shares plunging after underwhelming subscriber numbers sent investors running for the exits.

Packaged Software Stocks

Fund Price 1-Year Return
Xactly Corp XTLY $12.21 49.39%
Paycom Software Inc PAYC $46.29 33.19%
Gigamon Inc GIMO $41.32 29.65%
Rovi Corp ROVI $17.52 29.13%
Paylocity Holding Corp PCTY $44.08 23.29%
Simulations Plus Inc SLP $8.02 20.72%
Microsoft Corp MSFT $53.09 18.73%
Sapiens International Corporation NV SPNS $12.61 18.31%
Magic Software Enterprises Ltd MGIC $6.92 13.82%
Sabre Corp SABR $29.07 13.35%

Stock information correct as of June 19, 2016 at 4:45 p.m. EST.

Or see U.S. News’ list of Packaged Software stocks »

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Microsoft Crushes Earnings, MSFT Stock Pops originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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