Shares fell about 1% in trading after the bell
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Microsoft Corp.’s stock has lost about 25 per cent this year. Photo by REUTERS/Lucy Nicholson/File Photo Microsoft Corp. missed estimates for quarterly revenue on Tuesday, hurt by a stronger dollar, slowing sales of PCs and lower advertisement spending.
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Shares of the Redmond, Washington-based company fell about one per cent in trading after the bell. The stock has lost about 25 per cent this year.
Microsoft also faces pressure from a stronger greenback as it gets about half of its revenue from outside the United States. That led the company to lower its fourth-quarter profit and revenue forecasts in June.
The U.S. dollar index rose over two per cent in the quarter ended June and nearly 12 per cent this year, compared to a one per cent drop a year earlier for the same period.
Microsoft’s Azure cloud service grew by 40 per cent, compared with analyst estimates of 43.1 per cent, according to Visible Alpha.
Microsoft said that advertising revenue fell from LinkedIn, Search and News.
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Revenue from its personal computing segment stood at US$14.4 billion, compared with estimates of US$14.68 billion.
More On This Topic Financial Post columnist among 2022 inductees to Canada’s Investment Industry Hall of Fame Bank of America says stock outflows are catching up to market despair David Rosenberg: Cyclical sectors next ‘shoe to drop’ — and the TSX is especially vulnerable Soaring inflation has squeezed spending and weighed on consumer demand for PCs, sending global shipments down 15 per cent in the second quarter, according to research firm Canalys.
Competition in the sector has ramped up since the COVID lockdowns as more businesses seek to move computing and data storage to the cloud.
It reported revenue of US$51.87 billion in the fourth quarter, compared with US$46.15 billion a year earlier. Analysts on average had expected revenue of US$52.44 billion, according to Refinitiv IBES data.
Net income rose to US$16.74 billion, or US$2.23 per share, during the quarter ended June 30, from US$16.46 billion, or US$2.17 per share, a year earlier.
© Thomson Reuters 2022
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