Microsoft (MSFT) announced its Q2 results after its IPO on Tuesday, narrowly missing analysts’ expectations for revenue and better than earnings per share.
Here are key numbers from the report, compared to analyst expectations for the quarter, as compiled by Bloomberg.
Revenue: $52.7 billion versus $52.9 billion expected
Adjusted earnings per share: $2.32 versus $2.30 expected
Productivity and business processes: $17 billion versus $16.8 billion expected
Smart cloud: $21.5 billion vs $21.4 billion expected
More Personal Computing: $14.2 billion versus $14.7 billion expected
Microsoft shares surged more than 4% immediately after the news.
Despite the decline in earnings per share, Microsoft’s cloud business continued to slow during the quarter. The company reported that its intelligent cloud segment grew 18% in the quarter, while its Azure services grew 31%. That’s down from the second quarter of last year, when Intelligent Cloud and Azure grew 26% and 46%, respectively.
“The next great wave of computing is born as the Microsoft Cloud transforms the world’s most advanced AI models into a new computing platform,” Microsoft CEO Satya Nadella said in a statement. “We are committed to helping our customers use our platforms and tools to do more with less today and innovate for the future in the new era of AI.”
Microsoft’s announcement follows news that the company is making a multi-year, multi-billion dollar investment in OpenAI to better combat competitors ranging from Amazon (AMZN) to Google (GOOG, GOOGL).
The investment is intended to help Microsoft further differentiate its cloud offerings from competitors such as Amazon and Google. The company is also said to bring the technology to its Bing search engine, a move that could threaten Google’s search dominance.
However, just last week Microsoft cut around 10,000 jobs. The move comes as the company struggles with falling PC sales. Windows OEM revenue, which is the amount Microsoft makes from selling its operating system to PC makers, fell 39% year over year.
The story goes on
The company is also continuing its efforts to buy video game giant Activision Blizzard for $69 billion. So far, the Federal Trade Commission, the UK’s Competition and Markets Authority and the EU’s European Commission have either filed complaints about the deal or are working directly to nix it.
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