Microsoft (MSFT) has reported financial results that beat Wall Street forecasts due to strong growth in the company’s cloud computing unit.
The Seattle-based technology giant posted earnings per share (EPS) of $3.30 U.S., which topped analysts’ consensus expectation of $3.10 U.S.
Revenue in what was Microsoft’s Fiscal first quarter totaled $65.59 billion U.S., ahead of Wall Street forecasts that called for $64.51 billion U.S. Sales rose 16% from a year earlier.
Management attributed the strong results largely to the Azure cloud computing unit. Azure growth for the quarter came in at 33%, which was better than the 29.4% growth expected among analysts.
These were the first quarterly results from Microsoft under a new reporting structure that removed mobility, security, and some other data analytics from the cloud segment.
Microsoft’s full Intelligent Cloud unit that includes not only Azure but also Windows Server and enterprise services, generated $24.09 billion U.S. in revenue, up 20% year-over-year.
In other areas of its business, Microsoft said that it saw 2% growth in sales of its devices and Windows operating system licenses to device makers.
The company also continues to spend on artificial intelligence (AI) and the data centres that support AI applications.
Microsoft spent $20 billion U.S. on capital expenditures in Fiscal Q1, up 79% from a year earlier.
As for guidance, Microsoft said it expects revenue in a range of $68.1 billion U.S. to $69.1 billion U.S. in the current quarter. That was below the $69.83 billion U.S. consensus forecast on Wall Street.
The company also expects to take a $1.5 billion U.S. hit to income in the current quarter because of an expected loss from OpenAI, the start-up company that Microsoft has invested $14 billion U.S. into over the last two years.
OpenAI remains unprofitable and is expected to lose as much as $5 billion U.S. this year.
Microsoft’s stock fell 4% on news of its latest financial results. The share price had risen 17% before today (Oct. 31) and was trading at $432.53 U.S.
Tech Insider
