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Satya Nadella, CEO of Microsoft Corp., speaks at the Viva Technology conference in Paris, France, Thursday, May 24, 2018. Viva Tech, an event held three years ago for startups, brings together global leaders from technology and entrepreneurs like the French establishment unite behind a push for more technological investment in Paris.
Marlene Awaad | Bloomberg | Getty Images
Microsoft shares rose 6% in extended trading on Tuesday after the company reported second-quarter tax results and Azure cloud revenue growth that exceeded analysts’ expectations.
Here’s how the company did it:
- Earnings: $ 2.03 per share, adjusted, compared to $ 1.64 per share as expected by analysts, according to Refinitiv.
- Returned: $ 43.08 billion, compared to $ 40.18 billion as expected by analysts, according to Refinitiv.
Microsoft’s revenue grew 17% on an annualized basis, down from the 12% growth in the previous quarter, according to a statement.
Revenue from Microsoft’s Intelligent Cloud business segment, which includes Azure public cloud, server products such as Windows Server, GitHub, and enterprise services, totaled $ 14.60 billion. That’s up 23% year-over-year and above the consensus of $ 13.77 billion among analysts polled by FactSet.
Microsoft said Azure revenue increased by 50%. Analysts expected growth of around 42%. Microsoft does not disclose Azure revenue in dollars.
The More Personal Computing segment, which includes Windows, games, devices and search engine advertising, generated $ 15.12 billion in revenue, up 14% and beating the consensus estimate of 13.47 billion dollars FactSet. Technology industry research firm Gartner estimated that shipments of PCs, excluding Chromebooks, increased 10.7% in the quarter.
The segment’s operating margin narrowed to 34.5% from 40% following the introduction of two Xbox video game consoles in November.
During the quarter, Microsoft released Xbox Series X consoles for $ 500 and $ 300, as well as a small version of its Surface Laptop PC called Surface Laptop Go. The company also said some of its source code had accessed after the company detected SolarWinds malware in its environment.
As for the forecast, analysts are forecasting revenue of $ 38.70 billion in the third quarter, which would represent annualized growth of 10.5%.
Microsoft stock on Tuesday closed at $ 232.33 per share, posting a new high for the first time since September. Microsoft shares are up about 5% since the start of 2021, while the S&P 500 Index is up about 3%.
Executives will discuss the results on a conference call with analysts starting at 5:30 p.m. EST.
This is the latest news. Please come back for updates.
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