Shares of Microsoft rose 6% in expanded trading on Tuesday after the software maker posted earnings for the third fiscal quarter that exceeded analysts ’expectations and an optimistic forecast for the current quarter.
Here’s how the company did:
- Income: $ 2.22 per share with an adjustment against $ 2.19, as analysts expected, according to Refinitiv.
- Income: $ 49.36 billion versus $ 49.05 billion, analysts had expected, according to Refinitiv.
Microsoft’s revenue increased 18% year-over-year in the quarter ended March 31, up from 20% in the previous quarter, the report said. Microsoft has achieved the lowest profit since 2018, exceeding the consensus by less than 1%. Sales and marketing expenses were $ 5.6 billion, up 10% from last quarter, and the fastest growth in more than three years.
Amy Good, chief financial officer of Microsoft, said she expects fourth-quarter earnings of $ 52.4 billion to $ 53.2 billion in funding. The mid-range, $ 52.8 billion, is just below the consensus of $ 52.95 billion among analysts polled by Refinitiv.
The Intelligent Cloud segment, which includes the public Microsoft Azure cloud for hosting applications, along with SQL Server, Windows Server and enterprise services, generated $ 19.05 billion in revenue. That’s 26% more, exceeding the $ 18.90 billion consensus among StreetAccount analysts.
Revenue from Azure and other cloud services grew 46% in the quarter compared to 46% growth in the previous quarter. According to a CNBC survey of 13 analysts, expectations were 45.3%, while analysts polled by StreetAccount expected growth of 43.6%.
The number of Azure deals worth at least $ 100 million for the quarter has more than doubled, CEO Satya Nadella told analysts during the conference.
Microsoft’s performance and business process segment, which includes office productivity software, LinkedIn and Dynamics, generated quarterly revenue of $ 15.79 billion, up 17%, slightly more than StreetAccount’s consensus estimate of $ 15.79 billion. $ 75 billion. Microsoft has raised the price of some subscriptions to Office 365 performance software for the quarter.
The more personal computing segment, which includes Windows, Xbox, search advertising and Surface, generated revenue of $ 14.52 billion, up 11% from the StreetAccount consensus of $ 14.27 billion.
Microsoft said revenue from the sale of Windows licenses to PC makers rose 11% in the quarter. Microsoft forecast high unambiguous growth in January. Research firm Gartner estimated that PC shipments fell 6.8% in the quarter, the sharpest decline since the first quarter of 2020 after a market expansion caused by the pandemic. With the exception of PCs with Google Chrome OS, which became more popular during Covid, shipments rose 3.9%.
Revenue from security products and services falls into each of Microsoft’s three segments. In January, Microsoft said its security revenue grew nearly 45% in 2021, faster than any other major product category. The company first unveiled the financial figures of its security business last year, surprising some observers.
In the quarter, Microsoft announced plans to acquire video game publisher Activision Blizzard for $ 68.7 billion, making it the largest transaction in Microsoft’s 47-year history. Microsoft has also completed the acquisition of Nuance Communications and outlined a strategy to expand healthcare, the industry in which Nuance is focused. Nuance took a penny from Microsoft’s quarterly earnings, but increased revenue by $ 111 million.
Excluding the move during non-business hours, Microsoft shares have fallen 19% since the beginning of 2022, not yielding the performance of the S&P 500 index, which fell about 12% over the same period.
The executives will discuss the results with analysts and issue instructions at a conference beginning at 5:30 p.m. ET.
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