Microsoft shares rise 4% as earnings, revenue top forecasts
April 25 (Reuters) - Microsoft Corp (MSFT.O) beat Wall Street's estimates for third-quarter revenue on Tuesday, driven by growth in its cloud computing and Office productivity software businesses.
Shares gained 4% in after-market trading following a report by Redmond, Washington-based Microsoft that profits were $2.45 per share, beating Wall Street estimates of $2.23, according to data from Refinitiv and up 10% from the same quarter last year.
Revenue rose 7% to $52.9 billion in the quarter ended March, inching past the average analyst estimate of $51.02 billion, according to Refinitiv. The bulk of Microsoft sales still come from selling software and cloud computing services to customers, even though the company has grabbed headlines this year with its partnership with ChatGPT creator OpenAI and sprucing up the Bing search engine with artificial intelligence technology.
Microsoft said growth at its cloud business Azure was 27% in the latest reported quarter beating analyst expectations for 26.6% growth, according to the consensus from 23 analysts polled by Visible Alpha.
Analysts had expected a gloomy economic outlook to hit Microsoft's Windows business, which depends heavily on PC sales that have sagged in recent quarters. The sales drop in the segment was less severe than analyst expected, with Microsoft reporting revenue of $13.3 billion versus analyst estimates of $12.19 billion, according to Refinitiv data.
The company's productivity segment, which includes its Office software and advertising sales for the LinkedIn social networking site, also beat analyst expectations with revenue of $17.5 billion versus estimates of $16.99 billion, according to Refinitiv.
Overall revenue for the company's cloud unit, which includes Azure as well as other services, was $22.1 billion, slightly above estimates of $21.85 billion, according to Refinitiv data.
Reporting by Yuvraj Malik in Bengaluru; Editing by Maju Samuel
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