Microsoft CEO Satya Nadella speaks at the company’s Ignite Spotlight event in Seoul on Nov. 15, 2022. Nadella gave a keynote speech at an event hosted by the company’s Korean unit.
SeongJoon Cho | Bloomberg | Getty Images
Microsoft shares rose in extended trading on Tuesday after the company reported fiscal second quarter financials that topped analysts’ estimates.
Here’s how the company did:
- Earnings: $2.32 per share, adjusted, vs. $2.29 per share as expected by analysts, according to Refinitiv.
- Revenue: $52.75 billion, vs. $52.94 billion as expected by analysts, according to Refinitiv.
Microsoft’s total revenue increased by 2% year over year in that quarter ending Dec. 31, the slowest rate since 2016, according to a statement. Net income fell to $16.43 billion from $18.77 billion in the year-ago quarter. The company took a $1.2 billion charge in the quarter in connection with its decision to cut 10,000 employees, revise its hardware lineup and consolidate leases.
The decision to reduce head count “shows a commitment to margin defense despite top-line shakiness,” analysts at Raymond James wrote in a note to clients Monday. They recommend buying Microsoft shares.
In the quarter the U.S. Federal Trade Commission sued Microsoft to block its pending $69 billion acquisition of game publisher Activision Blizzard, while the U.S. Defense Department awarded Microsoft and three other companies a cloud contract worth up to $9 billion combined. Also, Microsoft introduced Designer, an application in which people can craft documents such as social media posts and event invitations.
Executives will discuss its quarterly results with analysts on a conference call Tuesday starting at 5:30 p.m. ET.
Correction: This story has been updated to reflect that Microsoft’s conference call with analysts will start Tuesday at 5:30 p.m. ET. A previous version gave an incorrect time.