Microsoft Reports Gains in Cloud-Computing Business -- Update
January 31 2018 - 5:18PM
Dow Jones News
By Jay Greene
Microsoft Corp. posted big fiscal second-quarter gains in its
cloud-computing business, continuing to carve out a spot for itself
as the No. 2 company behind Amazon.com Inc. in renting computing
power and storage over the web.
The Redmond, Wash., company said it recorded a $13.8 billion
charge related to changes to U.S. tax law that drove the company
into a quarterly loss.
The two biggest pieces of Microsoft's cloud-computing operations
-- its Azure infrastructure services and Office 365
online-productivity business -- posted giant gains in the fiscal
second quarter that ended Dec. 31. Though Microsoft doesn't
disclose revenue for those businesses, it said Azure jumped 98% and
Office 365 grew 41%.
Microsoft's Intelligent Cloud segment, which includes Azure,
climbed 15% to $7.8 billion. Its Productivity and Business
Processes segment, which includes Office, gained 25% to $8.95
billion.
Overall, Microsoft posted a net loss of $6.3 billion, or 82
cents a share, under generally accepted accounting principles,
compared with a profit of $6.27 billion, or 80 cents a share, a
year earlier.
Excluding the impact of the tax law, Microsoft reported a profit
of $7.5 billion, or 96 cents a share.
The company posted $28.92 billion in revenue, a 12% gain, when
measured using the new accounting standard for year-ago
results.
Analysts surveyed by S&P Global Market Intelligence expected
Microsoft to report per-share earnings of 86 cents on revenue of
$28.41 billion.
Shares, which have climbed nearly 50% in the last year, setting
record highs, fell 2% to $93.30 in after-hours trading.
The company's effective tax rate in the quarter was 18%, up
slightly from the year-ago period.
Microsoft rose to its former tech dominance on the strength of
Windows, its PC operating system. And while the More Personal
Computing segment that includes Windows is Microsoft's largest, it
is also the company's slowest growing. That is in part because
growth in world-wide PC sales remains sluggish, inching up only
0.7% in the last quarter, according to International Data Corp.
More Personal Computing gained 2% to $12.17 billion in the latest
period.
The segment also includes Microsoft's Xbox videogame business.
The holiday quarter is particularly important for gaming at
Microsoft, even more so after the company released its new Xbox One
X console in November. In the period, gaming revenue, which
includes sales of the Xbox console, Xbox Live subscriptions and
transactions, and game and accessory sales, rose 8%.
It has been a year since Microsoft purchased LinkedIn Corp., the
professional social network, for $27 billion. In the quarter,
LinkedIn added $1.3 billion in revenue.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
January 31, 2018 17:03 ET (22:03 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Apr 2023 to Apr 2024