Shares of Microsoft stock fell as much as 4 percent after the company issued its fiscal second-quarter earnings report with slightly lower revenue than expected.
Microsoft’s top business segment, More Personal Computing,which encompasses gaming, search advertising, Surface and Windows brought in $12.99 billion in revenue, below the $13.08 billion consensus estimate among analysts
Microsoft banked $9 billion in revenue from its Commercial Cloud category, which includes the Azure public cloud, commercial subscriptions to the Office 365 productivity software bundle, the Enterprise Mobility and Security products and commercial LinkedIn services.The unit was up 48 percent, reflecting a sequentially higher growth rate from 47 percent one quarter ago.Their cloud infrastructure lets companies offload their computing and data storage.
Revenue from Windows device makers fell 5 percent year over year in the worst results there in more than two years. On a conference call with analysts, Microsoft’s chief financial officer, Amy Hood, attributed those results in part to the timing of the supply of processors to PC partners. Meanwhile, Microsoft’s Surface revenue at $1.86 billion was up 39 percent.
The company’s Productivity and Business Process Segment including Dynamics, LinkedIn and Office — generated $10.10 billion in revenue, coming in barely over the $10.09 billion FactSet analyst estimate. Office revenue from consumers was affected by the PC environment, along with “some execution challenges we had,” Hood said.
And the Intelligent Cloud Segment, which includes Azure, enterprise services, SQL Server and Windows Server, posted revenue of $9.38 billion, beating the $9.28 billion estimate.This time it fell sequentially going from $4.3 billion to $3.9 billion.
In the quarter Microsoft had 33.3 million Office 365 consumer subscribers, up from 32.5 million in the fiscal first quarter. In December Microsoft had 64 million monthly active Xbox Live users, up from 57 million in September.
Microsoft is however expected to bring in between $29.4 billion and $30.1 billion in revenue in this year’s third quarter.Microsoft has been going back and forth with Amazon in recent weeks for thet by stock market value. The shares are up about 4 percent so far this year.