MSFT Stock: Microsoft Cloud Business Boosts Q4 Results
Software giant Microsoft (MSFT) late Tuesday beat expectations for its fiscal fourth quarter, thanks to continued growth in its cloud computing businesses. But MSFT stock retreated after its sales outlook missed views.
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The Redmond, Wash.-based company earned $2.69 a share on sales of $56.2 billion in the quarter ended June 30. Analysts polled by FactSet had expected Microsoft earnings of $2.55 a share on sales of $55.5 billion. On a year-over-year basis, Microsoft earnings rose 21% while sales climbed 8%.
"We delivered a solid close to the fiscal year driven by Microsoft Cloud quarterly revenue of $30.3 billion, up 21% year over year," Chief Financial Officer Amy Hood said in a news release.
Microsoft's Azure infrastructure business and other cloud services posted revenue growth of 26% in the quarter, edging views for 25% growth.
For the current quarter, Microsoft predicted sales of $54.3 billion, based on the midpoint of its outlook. Wall Street called for fiscal first-quarter sales of $55 billion.
MSFT Stock Pulls Back
In after-hours trading on the stock market today, MSFT stock sank 3.2% to 339.90. During the regular session Tuesday, MSFT stock rose 1.7% to close at 350.98.
MSFT stock notched an all-time high of 366.78 on July 18. Microsoft reached that record high after the company disclosed pricing details for Microsoft 365 Copilot, an artificial intelligence-based productivity tool.
Demand for generative AI will fuel Microsoft's cloud business, Chief Executive Satya Nadella said in a written statement.
"We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend, and driving operating leverage," Nadella said.
Microsoft On Two IBD Lists
Of Microsoft's three business segments, Intelligent Cloud was the top performer in the June quarter. Revenue in the segment increased 15% year over year to $24 billion. The unit includes server products and cloud services such as Azure.
Microsoft's Productivity and Business Processes unit saw sales rise 10% to $18.3 billion. The division includes Office productivity software as well as the Dynamics and LinkedIn businesses.
And finally, Microsoft's More Personal Computing unit saw sales decline 4% to $13.9 billion. The unit includes Windows PC software, Xbox video games, Surface computers, internet search and advertising.
MSFT stock is on the IBD Tech Leaders and Long-Term Leaders stock lists.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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Source: Investor's Business Daily
