Investors not so happy with Microsoft’s earnings results, stock down 3 percent

Microsoft yesterday reported its earnings results for the quarter ended December 31, 2018. The reported numbers didn’t break any new record and just met analysts estimates. Revenue was $32.5 billion, a modest 12% increase YoY and the operating income was $10.3 billion, an 18% increase. Microsoft CEO Satya Nadella mentioned that strong commercial cloud performance lead to these results. But investors are not so happy with Microsoft’s results which resulted in 3% decline of stock value after the market closed.

The following could be the concerns for investors:

  • Azure growth slowed down. Microsoft reported 76% revenue growth compared to 98% growth last year.
  • Due to stronger US dollar, Microsoft anticipates about 2 points of negative FX impact on revenue growth in Productivity and Business Processes and Intelligent Cloud, and 1 point in More Personal Computing.
  • Office consumer revenue growth to continue to be in the low single digits due to slow down in PC market.
  • Windows OEM revenue declined 5% due to PC market slow down and the decline will continue in this quarter.
  • Microsoft expects this quarter revenue between $29.4 billion and $30.1 billion. Analysts were expecting $29.9 billion.

If Microsoft’s stock price goes down today, Amazon may overtake its market cap once again.