Despite releasing quarterly results that fell short of Wall Street consensus, Microsoft published a positive income outlook for the coming year, which helped the company’s shares rise 5% in after-hours trading on Tuesday.
Here is how the business fared:
- Earnings: $2.23 per share, adjusted, vs. $2.29 per share as expected by analysts, according to Refinitiv.
- Revenue: $51.87 billion, vs. $52.44 billion as expected by analysts, according to Refinitiv.
Microsoft reported the weakest revenue growth since 2020 in the quarter that ended on June 30 with a 12 percent year-over-year increase. For the first time since 2016, the company’s earnings per share fell short of expectations, but net income increased 2 percent to $16.74 billion.
Microsoft’s fiscal first-quarter revenue guidance ranged from $49.25 billion to $50.25 billion. The midpoint of the range, at $49.75 billion, assumes an approximate 10% increase in revenue due to weaker PC sales and a slower expansion of cloud infrastructure. Refinitiv’s survey of analysts revealed higher expectations, coming in at $51.49 billion. The predicted gross margin for the company, at 69.85%, was higher than the 69.30% consensus among the analysts surveyed by StreetAccount.
The largest issue in the fourth quarter of the fiscal year was the deterioration of foreign currency rates. According to Microsoft, this decreased revenue by $595 million and earnings per share by 4 cents. Microsoft lowered its quarterly revenue and profits projections in June due solely to exchange rate swings. The quarter’s revenue and earnings were at the low end of the ranges Microsoft had suggested in June.
Microsoft’s Intelligent Cloud division, which offers enterprise services, SQL Server, Windows Server, and the Azure public cloud for hosting applications, made $20.91 billion in revenue. That was higher by 20% and fell short of StreetAccount’s polled analysts’ consensus estimate of $21.10 billion.
