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Microsoft had $36.77 billion in unearned revenue at year-end. This is below the StreetAccount consensus of $36.90 billion.
Technology company Microsoft Corporation (NASDAQ: MSFT) has announced earnings results for its fiscal second quarter (Q2), revealing better than expected earnings and revenue. After the announcement, the company’s stock reacted by declining in after-hours trading. However, MSFT made a turnaround, gathering some gains after Microsoft predicted sales and revenue that exceeds estimates for the current quarter. Currently, Microsoft stock is at a premarket trading price of $300.60. In the last 24 hours, the company has gained more than 4.22%.
Microsoft said adjusted earnings per share was $2.48, crossing analysis expectation of $2.31 in the fiscal second quarter. In addition, revenue was $51.73 billion, which was more than the $50.88 billion predicted by analysts. In comparison, the revenue Microsoft realized in its fiscal second quarter jumped 20% year-on-year. Furthermore, the technology company said net income surged 21% to $18.77 billion.
Revenue from Azure and other cloud services increased 46%, causing a significant break to the streak of 50% and above that Microsoft has been recording for the past four quarters. The revenue was more than analyst predictions, according to StreetAccount. Analysts polled by StreetAccount were hoping for 45.3% revenue growth from Azure. Also, revenue from the More Personal Computing segment was up 15.5% to $17.47 billion. This is more than the StreetAccount consensus of $16.56 billion.
Also, Microsoft had $36.77 billion in unearned revenue at year-end. This is below the StreetAccount consensus of $36.90 billion. Microsoft’s finance chief, Amy Hood, made an effort to calm investors’ concerns on the second-quarter earnings call.
Microsoft Predicts Stronger Revenue for Current Quarter after Better-Than-Expected Earnings in Fiscal Q2
Forecasting into the third fiscal quarter, Hood said Microsoft is expecting its revenue of $48.5 billion to $49.3 billion. The prediction for the coming quarter exceeded the $48.23 billion Refinitiv consensus. In addition, the finance chief said the company is expecting its full-year operating margins to widen slightly. Apart from a 23.875 loss over the past year, Microsoft has consistently declined. Generally, tech stocks have been plunging as investors opt out of the market. Since the year began, Microsoft has lost more than 14% since the year started and shed 10.73% in the last three months. Additionally, Microsoft shares have plunged 15.63% over the past month, losing nearly 5% in the last five days. With the losses and declines, Microsoft is on track for its worth a month since 2010.
A portfolio manager at Logan Capital Management which has about $60 million in Microsoft stock, Christopher Ouimet, said:
“We’d be buyers here. We think there’s a lot of noise in the marketplace right now. Most of the high-growth stocks are getting washed out here.”
During the fiscal second quarter, Microsoft intrigued Windows 11 to succeed Windows 10. The technology company also released the $249 Surface Laptop SE. According to Microsoft CEO Satya Nadella, there are now over 1.4 billion active devices running Windows 10 or Windows 11 on a monthly basis.