Stocksak: Microsoft taps cloud strength for revenue beat By Stocksak

© Stocksak. FILE PHOTO. Smartphone is seen standing in front of the Microsoft logo in this illustration, taken July 26, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

(Stocksak). -Microsoft Corp exceeded Wall Street’s first-quarter revenue targets on Tuesday. The ongoing shift to hybrid work drove demand for its cloud-based services, and helped cushion a slump for the personal computers business.

Microsoft (NASDAQ:), with its diverse product portfolio, including Outlook and Teams, has been essential for businesses to adopt flexible work models. This has helped it retain and attract customers during a period of economic slowdown.

Its Azure cloud computing unit also benefited from companies looking to digitize their operations. Large deals were won as businesses rely on technology to cut costs.

Azure grew 35% over the three months ending Sept. 30, but it missed Visible Alpha’s 36.5% analyst target due to a stronger Dollar. Azure grew 42% without taking into account foreign exchange factors.

Refinitiv reported that Microsoft’s Intelligent Cloud division, which includes the broader Microsoft business, saw a 20% increase of revenue to $20.33Billion. This is close to the estimates of $20.37B.

“We continue to see healthy demand across our commercial businesses including another quarter of solid bookings,” said Chief Financial Officer Amy Hood. 

However, Microsoft’s revenue was hurt by the slump in personal computer sales as well as the dollar surge. This shows that Microsoft is not immune to macroeconomic pressures.

Windows OEM revenue fell 15% as PC sales declined from highs during the pandemic. This is due to households and businesses cutting back on spending in the face decades-high inflation.

After the bell, shares of the Redmond-based company fell by 2.2%.

The company reported revenue for the quarter at $50.12 billion, compared to $45.32 billion one year earlier. According to Refinitiv IBES data analysts had forecast $49.61 trillion.

From $20.51 billion or $2.71 per shares a year ago, net income dropped to $17.56 trillion, or $2.35 per shared, in the quarter ended Sept. 30.

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