Proactive Investors - Microsoft Corp (NASDAQ:MSFT) reported higher-than-expected earnings in its fiscal second quarter driven by strong growth from its Cloud unit.
Revenue from its Intelligent Cloud segment came to $21.5 billion, up 18% and just ahead of the $21.4 billion consensus.
That led to overall revenue growing by 2% year-over-year at $52.8 billion, but below Street expectations of $52.9 billion.
However, adjusted earnings per share came in at $2.32 compared to $2.29 per share expected by analysts, leading to Microsoft’s shares rising nearly 9% in afterhours trading.
Investors and traders alike had anticipated seeing the technology giant lose traction on both earnings and profit.
“The decision to slash 10,000 jobs does highlight a bloated business which had grown its workforce by a whopping 77,000 since the beginning of the pandemic,” commented Joshua Mahony, senior market analyst at online trading platform IG.
Microsoft’s fiscal 2Q earnings highlight the need to bring costs under control, as rising interest rates and recession fears bring concerns that demand will collapse over the course of 2023, Mahoney added.
Investors will be looking for decent forward guidance to maintain the rally, which the company will reveal on a conference call Tuesday evening.
Any meaningful downgrades on outlook could see investors temper their risk appetite ahead of Tesla (NASDAQ:TSLA) earnings on Wednesday.