Microsoft boosts revenue forecast, Alphabet growth slows
Microsoft shares gained 4% after-hours, while Alphabet shares lost 4%
It was a tale of two tech companies and their quarterly results after the bell on Tuesday.
Microsoft reported the tech equivalent of a hat trick. For the quarter, Microsoft reported profit and revenue that topped expectations, and the company forecast double-digit revenue growth for the next fiscal year.
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The key driver being demand for cloud computing services, and its shares jumped about 5% in premarket trading.
Microsoft forecast Intelligent Cloud revenue of $21.1 billion to $21.35 billion for its fiscal fourth quarter. That is compared with a Wall Street consensus of $20.933 billion, according to Refinitiv data.
Microsoft & Google's parent Alphabet recorded results on Tuesday
"It was a record third quarter, driven by the continued strength of the Microsoft Cloud, which surpassed $23 billion in revenue, up 32% year-over-year," said CEO Satya Nadella, in the post-earnings call. "Going forward, digital technology will be the key input that powers the world’s economic output."
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The company reported revenue of $49.36 billion, compared with $41.7 billion a year earlier. Analysts on average had expected revenue of $49.05 billion, according to Refinitiv IBES data.
Net income rose to $16.73 billion, or $2.22 per share, in the quarter ended March 31, from $15.46 billion, or $2.03 per share, a year earlier. That topped analyst targets of $2.19.
A Microsoft logo in Los Angeles, California. REUTERS/Lucy Nicholson/File Photo
In contrast, Google parent Alphabet Inc reported that Google Cloud's growth rate in the first quarter fell slightly to 43.8%, from 44.6% in the 2021 fourth quarter. Alphabet's first-quarter revenue came in below expectations.
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Shares were down nearly 2% in premarket trading after the company posted its slowest quarterly revenue growth since 2020.
Google logo. (AP Photo/Marcio Jose Sanchez, File) (AP Photo/Marcio Jose Sanchez, File / AP Images)
Alphabet’s revenue during the January-March period totaled $68 billion, a 23% increase from the same time last year. The figure fell about $40 million below the average estimate among analysts polled by FactSet Research.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MSFT | MICROSOFT CORP. | 399.12 | -5.15 | -1.27% |
| GOOGL | ALPHABET INC. | 154.09 | -1.92 | -1.23% |
The first-quarter profit drooped 8% from last year to $16.4 billion, or $24.62 per share. That was also below the average analyst projection of $25.47 per share, according to FactSet.
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Google’s ad sales totaled $54.7 billion, during the first quarter, a 22% increase from the same time last year.