Updated at 4:28 PM EST
Microsoft (MSFT) – Get a free report posted better-than-expected second-quarter results late Tuesday, with stable growth rates for its main cloud computing division driving its shares significantly higher in after-hours trading.
Microsoft said revenue for Azure, its flagship cloud division, was up 31% year-over-year, above Street forecasts, but slowed from previous gains in the mid-to-high 40 percent range as companies continue to pull back on digital infrastructure spending and the dollar continued its 2022 climb.
Total group revenue rose 1.9% to $52.7 billion for the three months ending December, Microsoft’s fiscal second quarter, falling just short of analyst estimates of $52.97 billion.
Microsoft’s bottom fell 12% to $16.4 billion, while adjusted earnings fell 6.5% from last year to $2.32 per share, just above the Street consensus forecast of $2.30 per share. part.
Revenue from its productivity and business division, which includes Office 365, rose 7% to $17 billion, Microsoft said, while Intelligent Cloud revenue rose 18% to $21.5 billion, a figure the company had reported at the end of October. led. More Personal Computing revenue, including Windows, fell 19% to $14.2 billion.
“The next great wave of computing is being born as the Microsoft Cloud transforms the world’s most advanced AI models into a new computing platform,” said CEO Satya Nadella. “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 shares were marked up 3.7% in after-hours trading immediately following the earnings announcement, indicating a Wednesday opening bell price of $251.05 apiece.
Last week, Microsoft revealed plans earlier this month to cut about 5% of its global workforce as it seeks to align costs with customer demand and boost investment in areas such as AI and other advanced technologies. The company said severance payments and other costs related to the cuts were pegged at $800 million.
Microsoft said the cuts, which are expected to be completed in March, will result in the loss of about 10,000 jobs and a 12-cent drop for its December quarterly earnings, but added it would continue to invest in areas such as AI and other advanced technologies.
The job losses at the tech giant follow large staff relocations from Amazon (AMZN) – Get a free report and meta platforms (META) – Get a free report late last year, with the former revealing plans to cut its global workforce by about 18,000 and the latter planning to cut about 11,000 jobs.