Shares of technology giant Microsoft (MSFT) are down 7% after the company reported mixed
third-quarter earnings and lowered its forward guidance.
Microsoft reported earnings per share of $2.35 U.S. versus $2.30 U.S. that analysts had
expected, according to Refinitiv data. Revenue in Q3 amounted to $50.12 billion U.S. versus
$49.61 billion U.S. that was forecast on Wall Street.
However, the Seattle-based company lowered its forward guidance, saying it now expects
$52.35 billion U.S. to $53.35 billion U.S. in revenue for the current quarter, which implies about
2% growth at the middle of the range.
Analysts had been expecting revenue of $56.05 billion U.S. in the current quarter. The company
said in an earnings call that its business is being impacted by “cyclical trends.”
Microsoft’s Intelligent Cloud business segment, which includes the Azure public cloud,
generated $20.33 billion U.S. in Q3 revenue, up 20% from a year ago. That was about half the
40% growth in the previous quarter.
The company’s Productivity and Business Processes segment that contains Microsoft 365
software subscriptions, posted $16.47 billion in revenue, up 9% from the same period of 2021.
Revenue from the Personal Computing segment totaled $13.33 billion U.S, down slightly from
last year and below analysts’ forecasts. Sales of Windows licenses to device makers dropped
15% year-over-year.
During the earnings call, Microsoft announced plans to slow its pace of hiring and said it was
cutting less than 1% of its global workforce. Microsoft also introduced “Viva Engage,” a new
feature in the Teams communication app that enables co-workers to share video stories.
Microsoft’s stock is down 25% this year and trading at $250.66 U.S. per share.
