In the extended trading session on Tuesday, Microsoft’s shares experienced a slight dip of up to 2% after the company released its fiscal second-quarter results. Although the software giant surpassed analysts’ expectations for both earnings and revenue, its outlook for the upcoming quarter fell short of estimates.
Here’s a breakdown of Microsoft’s performance compared to analyst forecasts:
- Earnings: $2.93 per share, exceeding the expected $2.78 per share.
- Revenue: $62.02 billion, surpassing the anticipated $61.12 billion.
Looking ahead to the fiscal third quarter, Microsoft provided a revenue forecast ranging between $60 billion and $61 billion, with $60.50 billion as the midpoint. While this guidance was slightly below analysts’ expectations of $60.93 billion, the company anticipates lower-than-expected costs of revenue and operating expenses during the quarter.
Key highlights from Microsoft’s fiscal second-quarter results include:
- Revenue Growth: A year-over-year revenue increase of 17.6%, reaching $62.02 billion.
- Net Income: $21.87 billion, or $2.93 per share, up from $16.43 billion, or $2.20 per share, in the same period last year.
- Intelligent Cloud Segment: Generated $25.88 billion in revenue, with a 20% increase year over year, driven by Azure cloud services and other offerings.
- Azure Growth: Azure and other cloud services saw a 30% revenue growth, with six points attributed to artificial intelligence.
- Productivity and Business Processes Unit: Recorded $19.25 billion in revenue, up 13% year over year, driven by Office productivity software, LinkedIn, and Dynamics.
- More Personal Computing Segment: Contributed $16.89 billion in revenue, marking a 19% increase year over year, fueled by Windows, Surface, Bing, and Xbox.
Despite these positive results, Microsoft’s shares experienced a slight downturn in after-hours trading. The company’s acquisitions, including Activision Blizzard, and new offerings like the Copilot AI add-on for Microsoft 365, are expected to drive future growth. However, ongoing layoffs within subsidiaries like LinkedIn and the gaming unit have been noted.
Overall, Microsoft’s performance in fiscal Q2 exceeded expectations, but the slight dip in share price highlights investor concerns regarding the outlook for the upcoming quarter. Despite this, Microsoft shares have shown resilience, outperforming the broader market in the early months of 2024.
