In June, Microsoft lowered its own expectations for the quarter in terms of earnings and sales.
(Photo: Reuters)
new York Microsoft is struggling with the strong dollar and pandemic-related lockdowns in China. The world’s largest software group announced the figures for the fourth quarter on Tuesday after the US stock market closed: Sales were $51.9 billion, after almost $46.2 billion in the same period last year. According to Refinitiv data, analysts had expected 52.4 billion. Net income rose to $16.7 billion from just under $16.5 billion. Microsoft shares initially fell in after-hours trading, but then rose again by four percent.
“In a dynamic environment, we’ve seen strong demand, gained market share and increased customer engagement with our cloud platform,” said CFO Amy Hood.
Before the latest business figures were released, Microsoft shares had lost roughly a quarter of their value over the course of the year. The stock market is concerned about a further drop in tech values. However, the solid results at Microsoft and the counter-trend growing advertising business at Google provided cautious relief on the tech market on Tuesday evening.
Cloud business is developing solidly
Despite strong competition from Google and Amazon, the important cloud business performed solidly. In the area of intelligent cloud services, Microsoft achieved sales of 20.9 billion dollars (up 20 percent), which was just in line with market expectations. Revenue growth in the cloud core division around the Azure offering was 40 percent, without the exchange rate fluctuations it would have been even stronger.
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The fact that analysts’ expectations were slightly missed was “largely due to the exchange rate and the Covid lockdowns in China,” wrote Wedbush analyst Dan Ives.
The core of Microsoft’s growth story is the growth of the cloud division Azure, “which was healthy this quarter and is expected to continue until 2023 despite the economic headwind.” positive signal, according to Ives.
At the beginning of June, Microsoft lowered its expectations for the quarter in terms of profits and sales, already pointing to the strength of the dollar. The group generates about half of its sales outside of the United States.
With material from Reuters.
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