Microsoft shares soar after beating earnings forecasts thanks to cloud profits
Updated at 4:46 p.m. EST
Microsoft (MSFT) – Get a free report posted better-than-expected second-quarter earnings late Tuesday, with steady growth for its key cloud computing division sending its shares higher after hours of trading.
Microsoft said revenue for Azure, its top cloud division, grew 31% year-over-year, beating Street expectations but slowing from a previous mid-to-high 40% increase due to companies continue to reduce spending on digital infrastructure and the dollar continues to appreciate. mountain climbing in 2022.
Total corporate revenue rose 1.9% to $52.7 billion in the three months ended December, Microsoft’s second fiscal quarter, just below analyst estimates of 52.97 billion. dollars.
by Microsoft bottom fell 12% to $16.4 billion while adjusted earnings fell 6.5% from last year to $2.32 a share, just ahead of the Street consensus forecast of 2.30 dollars per share.
Sales of the business and productivity division, which includes Office 365, grew 7% to $17 billion, Microsoft said, while Smart Cloud revenue grew 18% to $21.5 billion, a single figure. which the company directed at the end of October. Revenue from Other PCs, including Windows, fell 19% to $14.2 billion.
“The next big wave of computing is coming, as the Microsoft Cloud transforms the world’s most advanced AI models into a new computing platform,” said CEO Satya Nadella. “We are committed to helping customers use our platforms and tools to do more for less today and innovate for the future in the new era of AI.”
Microsoft shares were marked 4% higher in after many hours trading shortly after the earnings announcement to indicate Wednesday’s opening price of $251.80 per share.
“Everybody knows that Azure growth is slowing; investors just want to see that it’s slowing down less than expected. And that’s exactly what happened this quarter, which allowed the Investors focus on other aspects of the stock, which should drive corporate sentiment,” said David Wagner, portfolio manager at Aptus Capital Advisors.
“After Azure, investors need to hear a lot of qualitative things for the company … specifically Azure’s future growth and public commentary on the second half of the year from a spending perspective,” he said. more.
Last week, Microsoft revealed plans earlier this month to cut about 5% of its global workforce as it appeared to “align costs” with customer demand and boost investment in new technologies. fields such as AI and other cutting-edge technologies. The company said severance payments and other costs related to the cuts were pegged at $800 million.
Microsoft said the cuts, expected to end in March, would result in about 10,000 job losses and 12 cents impact on December quarter earnings, but added that it would continue to invest in fields such as AI and other cutting-edge technologies.
Tech giant job cuts after big moves in headcount from Amazon (AMZN) – Get a free report and the Meta . Platform (META) – Get a free report at the end of last year, with previously revealed plans to reduce its global workforce by about 18,000 and future plans cut about 11,000 jobs.