Updated at 6:49 pm EST
Microsoft (MSFT) – Get Free Report posted better-than-expected second quarter earnings late Tuesday, with stable growth rates for its key cloud computing division and solid gains from its business unit.
Shares slipped lower in after-hours trading, however, when the group forecast current quarter revenues for its intelligent cloud division of between $21.7 billion and $22 billion, a tally that missed Refinitv forecasts.
For the December quarter, Microsoft said revenues for Azure, its flagship cloud division, rose 31% from last year, topping Street forecasts but slowing from earlier gains in the mid to high 40-percent range as companies continue to pull back on digital infrastructure spending and the dollar continued its 2022 climb.
Overall group revenues rose 1.9% to $52.7 billion for Microsoft’s fiscal second quarter, coming in just shy of analysts’ estimates of a $52.97 billion tally.
Microsoft’s bottom fell 12% to $16.4 billion while adjusted earnings fell 6.5% from last year to $2.32 per share, just ahead of the Street consensus forecast of $2.30 per share.
Productivity and business division revenues, which includes Office 365, rose 7% to $17 billion, Microsoft said, while Intelligent Cloud revenues were up 18% to $21.5 billion, a tally the company had guided in late October. More Personal Computing revenues, which includes Windows, fell 19% to $14.2 billion.
“The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” said CEO Satya Nadella. “We are committed to helping our customers use our platforms and tools to do more with less today and innovate for the future in the new era of AI.”
Microsoft shares were marked 0.5% lower in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $240.91 each.
“Everyone knows that growth is slowing in Azure; investors just want to see that it is slowing less than anticipated. And that’s exactly what happened this quarter, which allows investors to…