Microsoft CEO Satya Nadella speaks during the Microsoft Build conference at Seattle Convention Center Summit Building in Seattle, Washington, on May 21, 2024. Jason Redmond | Afp | Getty Images
Microsoft’s shares dropped by as much as 7% in extended trading despite reporting better-than-expected earnings and revenue for the fiscal fourth quarter. The decline was due to disappointing Azure cloud revenue, which grew 29% compared to the 31% expected. However, Microsoft executives forecasted accelerated cloud growth in the first half of 2025.
Key financial results included earnings per share of $2.95 versus the $2.93 expected and revenue of $64.73 billion versus the $64.39 billion expected, marking a 15% year-over-year increase. Net income rose to $22.04 billion, up from $20.08 billion in the previous year.
For the fiscal first quarter, Microsoft projected revenue between $63.8 billion and $64.8 billion, with expected operating expenses around $15.25 billion. The Intelligent Cloud segment, including Azure, generated $28.52 billion, slightly below the $28.68 billion consensus. Azure and other cloud services grew 29%, with 8 percentage points attributed to AI services.
The Productivity and Business Processes unit, which includes Office software and LinkedIn, generated $20.32 billion, while the More Personal Computing unit, including Windows, gaming, and devices, brought in $15.90 billion.
Despite the after-hours stock movement, Microsoft shares are up 12% year-to-date, compared to the S&P 500’s 13% gain.
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