Microsoft (MSFT) issued earnings that beat Wall Street forecasts, but its stock is down 4% after the company issued revenue guidance that missed expectations.
For the quarter ended June 30, Microsoft reported earnings per share of $2.69 U.S., which was better than the $2.55 U.S. consensus expectation of analysts polled by Refinitiv.
Revenue amounted to $56.19 billion U.S. versus $55.47 billion U.S. that was anticipated.
However, Microsoft shares sank on news that the company expects fiscal first-quarter revenue of $53.8 billion U.S. to $54.8 billion U.S.
That guidance implies about 8% growth for the current quarter, which is short of the $54.94 billion U.S. consensus expectation of analysts who track the company and stock.
Microsoft’s revenue grew 8% in the quarter ended June 30. Growth at the Seattle-based technology giant has now come in under 10% for three consecutive quarters for the first time since 2017.
Microsoft’s Intelligent Cloud segment saw its revenue grow 15% to $23.99 billion U.S. in the most recent quarter, while Azure revenue grew 26%. Microsoft doesn’t report quarterly Azure revenue in dollars.
For the first time since 2016, Microsoft’s research and development (R&D) costs declined year-over-year. The company said its operating expenses rose a modest 2% in the quarter.
Earlier this year, Microsoft implemented a salary freeze for employees and announced 10,000 job cuts as its growth slowed.
Currently, Microsoft is trying to finalize its $68 billion U.S. acquisition of video game maker Activision Blizzard (ATVI). Earlier in July, an appeals court judge denied the Federal Trade Commission’s (FTC) motion to stop the deal.
Microsoft is also rolling out new artificial intelligence (AI) products as it builds on its partnership with privately held company OpenAI.
Microsoft’s Azure OpenAI Service that companies can use to access large language models and other AI tools now has 11,000 customers, up from 4,500 in May, the company said.
Prior to today, the stock of Microsoft had gained 47% this year to trade at $350.98 U.S. a share.
Tech Insider
