(Bloomberg) — Microsoft Corp. reported disappointing quarterly sales growth in its Azure cloud-computing business, dashing optimism that growth would remain in overdrive as companies increasingly rely on internet-based services during the coronavirus outbreak.Azure revenue rose 47% in the quarter ended June 30, missing analysts’ predictions for a 49% gain and notably lower than the 59% jump of the prior quarter. Shares slipped about 2.7% in extended trading. The miss overshadowed an otherwise strong report — revenue rose 13% to $38 billion, the software maker said Wednesday in a statement. Analysts polled by Bloomberg on average estimated $36.5 billion. Net income was $11.2 billion, or $1.46 a share, including a 5-cent charge Microsoft took for closing its retail stores, compared with estimates of $1.36 a share.“Some of the bulls were hoping for more of a beat,” said Dan Ives, an analyst at Wedbush Securities.Corporate customers have been signing up for subscriptions and online versions of Microsoft’s Office productivity software to take advantage of programs like the Teams communications app. Many companies are also accelerating transitions to computing services like Microsoft’s Azure as they rely more on sprawling workforces that are unable to travel or come into offices. Investors pushed the stock 29% higher in the June quarter on mounting optimism that Microsoft would exceed expectations for cloud services growth. Ives noted that some were hoping for Azure growth of as much as 55%.Shares, which had risen 1.4% to $211.75 Wednesday in New York trading, fell as low as $204.52 in extended trading.(Adds analyst’s comment in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
from Yahoo Finance https://ift.tt/3jFTNYe
Leave a Reply