Microsoft falls in the stock market due to a slowdown in Azure and its growth

Microsoft ended the first quarter of its 2023 fiscal year with still solid results, but the slowdown of Azure worries. Witness the fall of 7.72% of action on Wednesday, red lantern on Wall Street. However, Microsoft exceeded expectations in terms of revenue and profit. Revenue reached $50.12 billion, up 11% (+16% at constant exchange rates) year-over-year, while analysts were expecting $49.60 billion. Net income fell 14% to $7.56 billion, or $2.35 per share, against a consensus estimate of $2.29.

The cloud business as a whole is up 24% to $25.7 billion, more than half of Microsoft’s total revenue. The “Intelligent Cloud” division, which includes the Azure platform, servers and cloud computing services, grew by 20% to reach $20.3 billion. Azure remains the locomotive with growth of 35%, but it was still 40% in the previous quarter. Microsoft CFO Amy Hood also warned that a further 5-point sequential decline (at constant exchange rates) is expected in the current quarter.

The “Productivity and Business Processes” business line, which includes Office, Dynamics and LinkedIn, had a more moderate increase in revenue of 9% to $16.5 billion. Office products grew by 7%, both on the professional and consumer side. LinkedIn and Dynamics perform better with 17% and 15% respectively.

The business line “More Personal Computing” (Windows, terminals and games) suffered the most this quarter due to the decline in the PC market. Overall, this is a slight decrease ($12.32 billion versus $12.36 a year earlier). The Windows OEM segment drinks the cup with a 15% decline. Fortunately for the publisher, the segment of professional versions of Windows is holding up better with 8% growth and Surface sales are up 2%.

With the combined slowdown in Azur and consumer products, Microsoft expects revenue for the current quarter to be between $52.35 billion and $53.35 billion. This time, it would be below analysts’ expectations, which are targeting $56.2 billion.

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