Microsoft stock was down by over 4% in extended trading despite the company’s reported profits and revenue beating expectations for the fiscal first quarter. This was because the company’s projection predicted slower growth than anticipated.
Data from an LSEG survey showed Earnings per share: $3.30 as opposed to $3.10 as anticipated Revenue: $65.59 billion as opposed to the anticipated $64.51 billion
According to a statement, revenue climbed 16% year over year for the quarter that ended on September 30. During the same period last year, net income increased 11% to $24.67 billion from $22.29 billion.
During a conference call with investors, CEO Satya Nadella stated, “I am fairly hopeful that as we enter the second half of even this fiscal year.”
Microsoft announced in August that it would update business segment reporting to match its management style. The productivity and business processes sector, which comprises Office software, now incorporates mobility and security services and some Windows revenue.
Productivity and business process revenue increased 12% to $28.32 billion during the quarter, exceeding the $27.9 billion consensus among analysts StreetAccount polled.
Microsoft’s use of cloud computing was made more transparent to investors. For the first time, mobility sales, security, and Power BI data analytics were not included in the revenue growth for Azure and other cloud services. Azure’s growth for the quarter was 33%, or 34% at constant currency, with artificial intelligence services accounting for 12 points.
The entire intelligent cloud market, which includes enterprise services, Windows Server, and Azure, brought in $24.09 billion. That is a 20% increase higher than the StreetAccount consensus of $24.04.