Microsoft’s Cloud and AI Business Drives Strong Quarterly Results
REDMOND, Wash. (AP) — Microsoft’s cloud computing and artificial intelligence business helped deliver $70.1 billion in sales and boosted profits by 18% for the January-March quarter, providing relief for investors during a turbulent time for the tech sector and U.S. economy.
The company reported quarterly net income of $25.8 billion, or $3.46 per share, beating Wall Street expectations for earnings of $3.22 a share. Revenue for the period, Microsoft’s third fiscal quarter, was up 13% from the same period a year ago, also exceeding Wall Street expectations.
Analysts polled by FactSet had expected Microsoft to post revenue of $68.44 billion for the quarter. Microsoft CEO Satya Nadella credited cloud growth for the strong quarter, with the company’s cloud unit posting revenue of $26.8 billion, compared to expectations of $26.17 billion.
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Nadella said in a statement. The company also saw a 6% increase in revenue in its personal computing unit, which includes its laptop business and Xbox services.
On a call with investors, Nadella noted that demand for cloud and artificial intelligence remained strong. He explained that Microsoft is constantly adjusting its investments based on efficiency improvements in computing systems and customer preferences.
“We just want to make sure we are accounting for the latest and greatest information,” he said. Despite recent market volatility, Microsoft’s strong earnings report sent its stock price up more than 6% in after-hours trading.
The company’s cloud computing business segment grew 21% to $26.8 billion, beating Wall Street projections. Revenue from Microsoft’s personal computing business, centered around its Windows operating system, was $13.4 billion for the quarter, up 6% from the first three months of last year.
