Source: Wall Street News
Author: Porridge Seven
Microsoft’s third-quarter EPS increased by 9% year-on-year to $2.22, and revenue increased by 18% year-on-year to $49.36 billion, both higher than market expectations. In terms of business segments, its largest revenue source, intelligent cloud revenue, was dazzling in the third fiscal quarter, recording a revenue of US$19.05 billion that exceeded expectations. Microsoft MSFT US stocks rose by 1% after the market due to the positive financial report, but then followed the impact of Google’s financial report on the same day and fell for a while, and then rose by more than 6%.
After the market on Tuesday, April 26th, Eastern Time, Microsoft announced its financial report for the first quarter ended March 31, 2022, that is, the company’s third fiscal quarter of fiscal 2022. Revenue and profits have exceeded expectations, and its largest source of income. ——Intelligent cloud business revenue continued to grow at a year-on-year growth rate of 26%, recording US$19.05 billion, higher than analysts’ expectations of US$18.9 billion.
On Tuesday, Microsoft closed down 3.74%, and rose 1% after the market due to the positive financial report, but then followed Google’s financial report on the same day and fell for a while, and then rose by more than 6%. Year-to-date, Microsoft is down nearly 20%, slightly better than Nasdaq’s 21% decline over the same period.
Specifically, its core financial indicators:
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Revenue in the fiscal third quarter was US$49.36 billion, an increase of 18% year-on-year, and revenue exceeded US$40 billion for the sixth consecutive quarter, which was higher than analysts’ expectations of US$49.04 billion and a year-on-year increase of 20% in the previous quarter.
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Diluted EPS for the fiscal third quarter was $2.22, up 9% year over year on a GAAP basis (14% non-GAAP) and above analysts’ expectations of $2.19.
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Net income for the fiscal third quarter was $16.728 billion, up 8% year-over-year on a GAAP basis.
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Sales and marketing spending totaled $5.6 billion in the fiscal third quarter, up 10% year over year and the fastest increase in more than three years.
From the perspective of Microsoft’s revenue by business during the reporting period, the revenue of the “Intelligent Cloud” business is still strong, and cloud services including the public cloud Azure, which is the most market-focused, increased by nearly 50%:
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In the fiscal third quarter, the “Productivity and Business Processing” business, which includes Office products for enterprises and personal consumers, LinkedIn, Dynamics products and cloud services, has an operating income of $15.8 billion, an increase of 17% year-on-year, basically flat with market expectations of $15.78 billion Dollar. Among them, Office 365 business revenue increased by 17% year-on-year, Office business product and cloud service revenue increased by 12% year-on-year, LinkedIn revenue increased by 34% year-on-year, Dynamics product and cloud service revenue increased by 22% year-on-year, and 365 revenue increased by 35% year-on-year.
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Revenue from the “Intelligent Cloud” business, which includes Azure, GitHub, server products, enterprise and cloud services, in the fiscal third quarter was $19.05 billion, up 26 percent year-on-year, beating analysts’ expectations of $18.9 billion. Among them, revenue from Azure and other cloud services increased by 46% year-on-year, and revenue from server products and cloud services increased by 29%.
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Revenue from the “more personal computing” business, which includes Windows, search, Xbox and Surface computers, was $14.52 billion in the fiscal third quarter, up 11 percent from a year earlier, beating analysts’ expectations of $14.33 billion. Among them, Windows OEM revenue increased by 11% year-on-year, Windows commercial products and cloud services revenue increased by 14%, Xbox content and services revenue increased by 4%, search and news advertising revenue (excluding traffic acquisition costs) increased by 23%, Surface revenue increased by 13% %.
Microsoft said revenue from sales of Windows licenses from PC makers rose 11 percent in the quarter. Microsoft had forecast high-single-digit growth in January. Research firm Gartner estimates that PC shipments fell 6.8% in the quarter, the sharpest decline since the first quarter of 2020, after the pandemic boosted market expansion. Excluding PCs running Google’s Chrome OS operating system, shipments rose 3.9 percent.
In addition, Microsoft returned $12.4 billion to shareholders in the form of stock repurchases and dividends in the fiscal third quarter, a 25% year-over-year increase compared to the third quarter of fiscal 2021.
Satya Nadella, chairman and CEO of Microsoft Corporation, said:
Going forward, digital technologies will be a key input in driving the world’s economic output, and across the technology stack, we are expanding our opportunities and market share as we help our clients differentiate and build resilience, and do it for less more things.
Amy Hood, executive vice president and chief financial officer of Microsoft, said,
Continued customer commitment to our cloud platform and strong sales execution drove 28% growth in commercial bookings, with Microsoft cloud revenue of $23.4 billion, up 32% year over year, better than expected.
Better-than-expected (the company’s original) sales of console Xbox hardware, increased supply of controllers, which drove Xbox sales; Azure cloud computing service is growing faster than I personally thought.
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