Microsoft Sales Meet Estimates

Microsoft Sales Meet Estimates
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Microsoft reported second-quarter sales that met projections, according to Bloomberg. Adjusted profit in the period ended Dec. 31 rose to $8.58 billion, or $1.10 a share, compared with the $1.09 average estimate of analysts. Sales climbed 12 percent to $32.5 billion, Microsoft said in a statement, matching predictions.

Microsoft’s market value soared above its peers during the quarter as investors bet the company’s cloud and enterprise-software business was more stable than other parts of the technology market. While Microsoft’s Azure cloud-services revenue grew 76 percent, the closely watched segment’s growth rates have slowed from the near-doubling that business posted each quarter in 2017 and early 2018. At the same time, the PC market, which had been showing signs of stability, resumed a steeper decline in the December period.

Commercial cloud sales rose 48 percent to $9 billion in the fiscal second quarter, while margins in that business widened by 5 percentage points to 62 percent, Microsoft said in slides on its website. Microsoft’s Productivity division, mostly sales of Office programs, saw second-quarter sales rise 13 percent to $10.1 billion, in line with the average estimate.

Intelligent Cloud sales rose 20 percent to $9.38 billion. That compares with a $9.27 billion estimate. Revenue in the More Personal Computing division, which includes Windows and Xbox, rose 6.8 percent to $12.99 billion. Analysts had expected $13.08 billion on average.

Microsoft CFO Amy Hood said cloud demand held up in the recent quarter, and the company continues to spend to build out its cloud offerings. The company will boost capital expenditures in the current period to invest in cloud-data centers after some of that spending came in a bit below her forecast in the second quarter, she said. In the current quarter, the Intelligent Cloud unit will see revenue rise about 17 percent, including a 2 percent decline related to the impact of a strong U.S. dollar, Hood said on the call.