Microsoft reported slowing profits and cloud growth that fell short in its fiscal first quarter, sending shares of the software maker down slightly in extended trading.
The company posted a slight beat when it came to the top and bottom lines. Microsoft reported $2.35 per share on revenue of $50.12 billion, compared to Wall Street’s anticipated $2.30 per share on $49.61 billion.
Still, while revenue gained 11%, its net income has decreased 14% to $17.56 billion.
“In a world facing increasing headwinds, digital technology is the ultimate tailwind,” CEO Satya Nadella wrote in an earnings release. “In this environment, we’re focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way.”
Investors have kept a sharp eye on Microsoft, watching for any perceived sales dips or weakening demand for its cloud services or software. Consumers rushed to purchase computers and other devices as they stayed home during the coronavirus pandemic, but now appear to be scaling back. The company is also hampered by the strengthened dollar and other tough macroeconomic conditions.
Microsoft’s Intelligent Cloud segment reported revenue of $20.3 billion, which is a gain from the same period a year ago, but missed Wall Street’s expectation. Its cloud service, Azure, also grew 35% in the quarter, though the company reported a slowdown in growth from the previous quarter.
Revenue for its Productivity and Business Processes, which contains Office Commercial and Consumer products as well as LinkedIn revenue, were up 9% to $16.5 billion. Microsoft reported More Personal Computing revenue, which includes Windows, search and news advertising, decreased slightly in the quarter to $13.3 billion.
The company is expected to release second-quarter guidance during a conference call with investors that is set for 5:30 p.m. ET.
Recognize your brand’s excellence by applying to this year’s Brands That Matter Awards before the early-rate deadline, May 3.
