Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving lower in after-hours trading Tuesday.
The company generated fiscal fourth-quarter net income of $20.1 billion, or $2.69 a share, compared with $16.7 billion, or $2.23 a share, in the year-earlier period. Analysts tracked by FactSet were modeling $2.55 a share.
Revenue for Microsoft
MSFT,
climbed to $56.2 billion from $51.9 billion, whereas analysts had been expecting $55.5 billion.
Microsoft’s cloud-computing segment, which it calls Intelligent Cloud, jumped 15% to $24.0 billion, while analysts had been anticipating $23.8 billion. The growth rate was 17% on a currency-neutral basis.
The company said revenue for Azure and other cloud services was up 26%, or 27% in constant currency. Microsoft’s forecast had been for 26% to 27% in constant-currency Azure sales growth, while the company posted 31% constant-currency growth on the metric in the March period. The FactSet consensus was for 27% growth in constant currency.
“While we believe the Street was hoping for Azure growth more in the ~28% range, we believe the consumption part of the business held up well,” Evercore ISI analyst Kirk Materne said in a note to clients.
Chief Executive Satya Nadella said Microsoft was “focused on leading the new AI platform shift” as companies ask “not only how, but how fast, they can apply this next generation of AI to address the biggest opportunities and challenges they face.”
See also: Microsoft bulls are excited as company reveals pricing for AI offering
Shares were down 2% in after-hours trading Tuesday. The company saves its forecast for its earnings call, scheduled for 5:30 p.m. Eastern.
Microsoft logged $18.3 billion in revenue for its productivity and business processes unit, up 10% from a year before, or up 12% in constant currency. This part of the business includes LinkedIn and both commercial and consumer versions of Office. Analysts had been looking for $18.1 billion.
Revenue for the More Personal Computing segment, which includes Windows and Xbox content and services, dropped 4% to $13.9 billion and was off 3% on a constant-currency basis. The FactSet consensus was for $13.6 billion.
“Overall, we believe that Microsoft delivered solid F4Q results despite a lot of macro headwinds, and we believe that the investment narrative gets stronger in [the second half of the calendar year] as some optical headwinds reverse and [comparisons] soften, and Microsoft’s position in the enterprise market continues to get stronger as customers look to consolidate spending,” Evercore’s Materne wrote.
Read: Amazon finally is nearing a bottom on this key measure, analyst says
Read the full article here
