Microsoft’s profit topped analysts’ estimates in the second quarter, helped by strength in its cloud-services business even in a period when a weakening global economy ate into demand for personal-computer and corporate software. Shares rose about 4 per cent in late trading.
Adjusted profit was $2.32 (€2.13) a share in the period ended December 31, and sales rose 2 per cent to $52.7 billion. the company said in a statement. That compared with average analysts’ projections for $2.30 a share in earnings and $52.9 billion in revenue, according to a Bloomberg survey. In Microsoft’s closely watched Azure cloud-computing business, sales gained 38 per cent, compared with predictions for a 37 per cent increase, excluding the impact of currency fluctuations.
In the past quarter, Microsoft’s growth engines have faltered as corporate customers became warier of spending in an uneven economic environment. Still, Tuesday’s quarterly results underscored the software maker’s resilience, thanks to relatively steady demand for corporate cloud-computing services, even if gains are less robust. Azure’s durability helped the company report growth even as sales of Windows software to PC makers plummeted amid a slumping market.
“The sentiment has gotten considerably worse than the last three months, said Gil Luria, an analyst at D.A. Davidson. The quarter’s results may have been a “relief to the stock, because actual expectations on the downside are even lower than that.
Microsoft said it would record a charge of $1.2 billion, or 12 cents a share, in the latest quarter related to the job cuts, which will affect less than 5 per cent of its workforce. The Redmond, Washington-based company said last week the charge will include severance, “changes to our hardware portfolio and the cost of consolidating real estate leases.
The software giant’s shares rose as high as $254.79 in extended trading following the report, after closing at $242.04 in New York. The stock declined 29 per cent in 2022, compared with a 20 per cent decline in the Standard & Poor’s 500 Index.– Bloomberg