Microsoft surprises investors in sales and profit beat
Microsoft topped analyst estimates for both sales and earnings in its fourth fiscal quarter, but shares still dropped slightly in after-hours trading.
Microsoft reported earnings per share of $1.46 in the three months to the end of June, compared to an average estimate of $1.34. However overall its net income was $11.2bn, down 15 per cent year-on-year.
Revenue rose 13 per cent to $38.03bn, beating estimates of $36.5bn.
Meanwhile its flagship cloud computing business Azure reported sales growth of under 50 per cent for the first time ever, a division that is a major focus in attracting profit for Microsoft.
Revenue in its Intelligent Cloud segment rose 17 per cent to $13.4bn, with 47 per cent growth in Azure. Analysts on average had expected revenue of $13.09bn, according to IBES data from Refinitiv.
Its shares ended the session up 1.44 per cent, but slipped almost three per cent in after-hours trading as investors reacted to the figures.
Revenue from its personal computing division — its largest by sales, which encompasses Windows software, Xbox and Surface computers — rose 14 per cent to $12.9bn, beating analysts’ estimates of $11.46bn.
The earnings come after Microsoft was hit with a formal complaint to EU antitrust authorities today by rival workplace messaging app Slack.
Slack alleged that Microsoft’s bundling of its Teams platform with its Office 365 constituted forced installation of its software, marking an abuse of its market power to eliminate rivals.
Microsoft said it would assist the European Commission with its investigation.
“The last five months have made it clear that tech intensity is the key to business resilience. Organisations that build their own digital capability will recover faster and emerge from this crisis stronger,” said Microsoft chief Satya Nadella in a statement attached to the results.