SAN FRANCISCO (Agefi-Dow Jones)–Microsoft warned Tuesday evening that its activity would be less buoyant than expected between January and March, after having managed to exceed expectations in the “cloud” in the second quarter of its staggered financial year.
The turnover for the current quarter could be more than a billion dollars lower than Wall Street forecasts, according to estimates presented in the evening.
“We are seeing customers treading cautiously,” which translated into a slowdown in orders in December, the group’s chief financial officer, Amy Hood, said on a conference call.
“We expect the trends observed at the end of December to continue” this quarter, added the leader.
Microsoft is targeting revenue of around $51 billion for the current quarter, up 3% year-on-year but significantly below analysts’ FactSet consensus of $52.42 billion.
Microsoft stock was down 1.3% in post-close trading on Wall Street following the statements, after initially jumping 4% in reaction to the release of financial results for the past quarter.
The group’s outlook is penalized by the slowdown in the economy at the end of 2022, which prompted many companies to reduce their costs. Microsoft executives had indicated at the end of the previous fiscal year that they were counting on double-digit growth in sales and operating margins this year, but the business climate has since deteriorated markedly.
Dematerialized services still dynamic this fall
The California-based group announced thousands of job cuts last week, following in the footsteps of other tech giants, which are adjusting their workforces to prepare for a possible recession after recruiting massively following the health crisis.
“We expect this social plan to be followed by a lowering of sales forecasts for the second half. But these metrics illustrate Microsoft’s ability to adjust its cost base to preserve earnings and cash flow,” Evercore ISI analysts warned in a note ahead of the earnings release.
The software publisher also announced Tuesday evening a 12% drop in its net income in the second quarter, to 16.43 billion dollars, or 2.20 dollars per share. Excluding impairment and severance pay, adjusted earnings were $2.32 per share, versus a FactSet consensus of $2.29.
Turnover for its part increased to 52.75 billion dollars over the period, against 51.7 billion dollars a year earlier, but did not quite reach the consensus, which was 52.99 billion. of dollars.
The cloud computing branch posted revenue of $21.5 billion, up from $18.33 billion a year earlier, narrowly beating consensus of $21.43 billion . Microsoft’s cloud-based application platform, Azure, posted 31% growth, as analysts expected revenue to rise 30.5%. Unlike Alphabet and Amazon, Microsoft does not detail the profitability of its cloud business.
-Jeremy Owens, MarketWatch (French version Thomas Varela) ed: JEB
Agefi-Dow Jones The financial newswire
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