Microsoft Corp.’s second-quarter profit topped analysts’ estimates, helped by strength in its Azure cloud-services business even as demand slumped for personal-computer and corporate software. Shares rose more than 4 percent in late trading.
Adjusted profit was $2.32 a share in the period ended December 31, and overall sales rose 2 percent to $52.7 billion, the company said in a statement. That compared with average analysts’ projections for $2.30 a share in earnings and $52.9 billion in revenue, according to a Bloomberg survey. In Microsoft’s closely watched Azure cloud-computing business, sales gained 38 percent, compared with predictions for a 37 percent increase, excluding the impact of currency fluctuations.
Microsoft last week said it’s firing 10,000 workers. In the past quarter, the software giant’s growth engines have faltered as corporate customers became wary of spending in an uneven economic environment. Still, Tuesday’s quarterly results underscored the software maker’s resilience, thanks to relatively steady demand for corporate cloud-computing services, even if gains are less robust. Azure’s durability helped the company report growth even though sales of Windows software to PC makers fell sharply amid a shrinking market.
“The sentiment has gotten considerably worse than the last three months,” said Gil Luria, an analyst at D.A. Davidson. The quarter’s results may have been a “relief to the stock, because actual expectations on the downside are even lower than that.”
Microsoft said it recorded a charge of $1.2 billion, or 12 cents a share, in the latest quarter, with $800 million of that related to the job cuts, which will affect less than 5 percent of its workforce. The Redmond, Washington-based company said last week the charge will include severance, “changes to our hardware portfolio” and the cost of consolidating real estate leases.
The company’s shares rose as high as $254.79 in extended trading following the report, after closing at $242.04 in New York. The stock declined 29 percent in 2022, compared with a 20 percent decline in the Standard & Poor’s 500 Index.