Microsoft shares were flat in extended trading on Tuesday after the software maker issued fiscal third-quarter earnings that exceeded analysts' expectations.
The company did it.
The company's revenue increased by 18% in the quarter which ended on March 31, compared with the previous quarter. Sales and marketing expenditures grew 10% in the third quarter, the fastest growth in three years.
The company generated $19.05 billion in revenue from its Intelligent Cloud segment. That is up 26% and above the $18.90 billion consensus among analysts.
Revenue from cloud services jumped in the quarter, compared with the previous quarter. According to a CNBC survey of 13 analysts, the expectation was 45.3%, while StreetAccount had been looking for 43.6% growth.
The Productivity and Business Processes segment, containing Office productivity software, posted a revenue of $15.79 billion in the quarter, up about 17% and slightly more than the StreetAccount consensus estimate of $15.75 billion. Microsoft raised the prices of certain Office productivity software.
The More Personal Computing segment, which includes Windows, Xbox, search advertising and Surface, kicked in more revenue than the StreetAccount consensus.
The revenue from Windows license sales to PC manufacturers increased in the quarter. In January, Microsoft projected a high-single-digit growth. The decline in PC shipments was the worst since the first quarter of 2020, according to a research firm. Excluding PCs that run the Chrome OS operating system, shipments rose by 3.9%.
Revenue from security products and services is under the Microsoft segments. Microsoft said in January that its security revenue grew 45% faster than any other major product category. The financial figures from the security business were disclosed for the first time last year.
In the quarter Microsoft announced a plan to acquire video-game publisher Activision Blizzard for $68.7 billion, the largest transaction in Microsoft's 47-year history. Microsoft laid out a strategy for expanding in health care after closing its acquisition of Nuance Communications. Microsoft had a penny taken from its earnings but added $111 million in revenue.
Since the start of the year, Microsoft stock has declined 19%, but the S&P 500 index is down 12%.
Executives will give guidance on a conference call after the results are announced. Time.
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Weingarten says that they are seeing about a thousand vulnerabilities patched by Microsoft each year.
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