Software titan Microsoft (MSFT) late Tuesday beat Wall Street’s targets for its fiscal second quarter thanks to strong cloud computing business. But its sales guidance for the current quarter was a shade below estimates. MSFT stock wavered in extended trading.
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The Redmond, Wash.-based company earned $2.93 a share on sales of $62.02 billion in the quarter ended Dec. 31. Analysts polled by FactSet had expected Microsoft earnings of $2.77 a share on sales of $61.1 billion. On a year-over-year basis, Microsoft earnings increased 33% while sales rose 18%.
“Strong execution by our sales teams and partners drove Microsoft Cloud revenue to $33.7 billion, up 24% year over year,” Chief Financial Officer Amy Hood said in a news release.
Chief Executive Satya Nadella boasted about the company’s artificial intelligence offerings.
“We’ve moved from talking about AI to applying AI at scale,” Nadella said in a statement. “By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”
MSFT Stock Dips After Report
For the current quarter, Microsoft forecast sales of $60 billion to $61 billion. The midpoint of $60.5 billion was below the consensus estimate of $61 billion for the March quarter, according to FactSet.
In after-hours trading on the stock market today, MSFT stock swung between gains and losses. In recent trades, it was down a fraction to 408.07. During the regular session Tuesday, MSFT stock slid 0.3% to close at 408.59.
Of Microsoft’s three business units, Intelligent Cloud was the top performer in the December quarter. Revenue in the segment increased 20% to $25.9 billion. The unit includes server products and cloud services such as Azure.
Azure cloud infrastructure sales rose 30% year over year in fiscal Q2.
Microsoft’s Productivity and Business Processes unit saw sales rise 13% to $19.2 billion. The division includes Office productivity software as well as the Dynamics and LinkedIn businesses.
And lastly, Microsoft’s More Personal Computing unit saw sales increase 19% to $16.9 billion. The unit includes Windows PC software, Xbox video games, Surface computers, internet search and advertising.
Sales in the More Personal Computing group got a boost from Microsoft’s acquisition of video game publisher Activision Blizzard.
Microsoft Stock Is A Recent Breakout
MSFT stock is on three IBD stock lists: IBD 50, Tech Leaders and Long-Term Leaders. Microsoft also is one of the Magnificent Seven stocks.
On Jan. 11, Microsoft stock broke out of a flat base at a buy point of 384.30, according to IBD MarketSmith charts.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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