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Microsoft’s stock price (NASDAQ: MSFT) fell by 0.59% in yesterday’s trading, following a quarterly report that showed a 12% drop in profits for the quarter ending in December. The company also projected that revenue for the current quarter could be about $1 billion lower than Wall Street’s expectations.
Despite the profit decline, the report revealed that Microsoft performed better than anticipated, thanks to strong results in cloud computing and enterprise applications. Azure’s public cloud business exceeded growth estimates, offering some reassurance to investors worried about corporate IT spending.
However, the company’s PC business didn’t fare as well. Revenue from the Personal Computing segment came in at $14.2 billion, down 19%, or 16% when adjusted for currency. This was below the company’s forecast of $14.5 to $14.9 billion.
For the fiscal year ending December 31, 2022, Microsoft reported revenue of $52.7 billion, a 2% increase from the previous year. Yet, this was still below Wall Street’s forecast of $53.1 billion, which likely contributed to the recent market declines.
Looking ahead, Microsoft anticipates a challenging first quarter, with revenue expected to miss projections by around $1 billion. CFO Amy Hood mentioned concerns about “customers exercising caution” during a recent conference call.
Despite these challenges, Microsoft is taking steps to cut costs, including laying off 10,000 workers, or 5% of its workforce. This move is expected to improve profits, even with the revenue drop. Share earnings stood at $2.20 based on the latest data, which could attract investors.
Overall, I remain optimistic about Microsoft’s stock price. There’s a good chance it could rise above the $263 level in the coming trading sessions.