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Ma Lu
Jan 25, 2023 10:41AM ET
A turning point for MS and all shareholders!
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Microsoft under pressure after slowest revenue growth in six years
Microsoft shares gain 4% on Q2 EPS beat
By Davit Kirakosyan and Geoffrey Smith
Investing.com -- Microsoft (NASDAQ:MSFT) shares are set to open under pressure later Wednesday after the software giant reported its slowest sales growth in six years and warned that there may be worse to come.
Revenue grew only 2% year-over-year in the three months through December to $52.7 billion, missing the consensus estimate of $53.12B. While earnings were fractionally ahead of expectations at $2.32 a share, they were still down 12% on the year at $16.4B.
Microsoft's numbers have significant implications for the rest of the U.S. stock market, given its massive reach across all sectors of the economy. While there was little shocking about them, they added to impressions that the U.S. economy will face a tough time this year. The company had already announced some 10,000 job cuts earlier in the week.
Analysts zoomed in on the slowdown in growth at Microsoft's intelligent Cloud business division, which has posted years of spectacular growth and had largely defied the post-pandemic slowdown in Internet- and remote-themed business until recently.
Intelligent Cloud revenue was up 24% year-on-year in constant currencies in the quarter but Microsoft sees it edging up to around $21.85B in the current quarter, an implicit annualized growth rate of only 6.6%, according to Investing.com calculations. Analysts had expected around $22.14B.
Microsoft's other businesses are already showing more signs of struggling with the broader slowdown in the economy. Revenue in its personal computing business fell 19%, or 16% in constant currency terms, with demand for laptops and PCs fading as the world returned to office-based work after the pandemic.
Similarly, revenue from its Xbox gaming division fell 12%, or 8% in constant currency, as locked-down consumers got off their couches.
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Comments (6)
Ernie Keebler
Jan 25, 2023 6:25AM ET
Stock market is not a true market it's a huge ponzi/pyramid scheme that sinks when early investors want to take profits and not enough new foolish money comes in to support. Manipulated by company buybacks to falsely support prices and a lot of other Tom foolery. Even the fed comes in to manipulate to keep the precious valuations artificially high
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Lazaros Kotsidis
Jan 25, 2023 6:25AM ET
Exactly
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First Last
Jan 25, 2023 6:25AM ET
Then by your definition, what markets are NOT "ponzi/pyramid scheme"?
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Prabhat Negi
Jan 25, 2023 5:12AM ET
these people last night said markets up as MS beats expectations.. now this .. shows exactly what's wrong with the system. it's all manipulated to fool you from top to bottom
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Lucas Gabriel Sajkiewicz
Jan 25, 2023 5:12AM ET
It was enough watching the report. Pump was completely fake.
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jason xx
Jan 25, 2023 5:12AM ET
Growth is growth
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MBA BC
Jan 25, 2023 5:12AM ET
Easily fixed, don't listen.
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Hanna Christin
Jan 25, 2023 5:12AM ET
Lucas Gabriel Sajkiewicz people were trading the stock without listening to the conference call...
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Bill Riley
Jan 24, 2023 6:37PM ET
Microsoft is WOKE
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jason xx
Jan 24, 2023 6:37PM ET
You're so cool I have to put a jacket on
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Maximus Maximus
Jan 24, 2023 6:37PM ET
bill due to your comment, microsoft have decided to quit the woke tech industry and instead start producing banjos and assault rifles
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Paul Har
Jan 24, 2023 5:40PM ET
Tech bubble
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James Johannsen
Jan 24, 2023 5:40PM ET
everything bubble
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Mark Deren
Jan 24, 2023 5:26PM ET
Wow! Microsoft beats by $0.02 on earnings and misses by $420M on revenues and is going to be up nearly 5%? Because Cloud revenue was up? This is like NFLX missing numbers horribly but stock rising like a rocket because subscribers beat! These are mature companies, not small startup where things like subscribers and one source of revenue us up while others stagnate. Ridiculous!
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Ronald Warren
Jan 24, 2023 5:26PM ET
Exactly!!
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Thanos theBear
Jan 24, 2023 5:26PM ET
Microsoft sucks arse
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Derick Lim
Jan 24, 2023 5:26PM ET
scammers
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Simon Meszaros
Jan 24, 2023 5:26PM ET
You may have already noticed and that is rather new phenomena that some stocks are used as a value store and hedge against inflation. So why surprised then? Stock market is only huge absorber of excessive money. It can reverse some day, probably not there yet. Stocks are more natural than anything..
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