Microsoft ( MSFT ) reported its Q2 earnings after the bell on Tuesday, missing analysts’ expectations on revenue and beating earnings per share.
This is the most important number from the report compared to what analysts were expecting in the quarter, as compiled by Bloomberg.
Income: $52.7 billion vs. $52.9 billion expected
Adjusted EPS: $2.32 vs. $2.30 expected
Production and business process: $17 billion vs. $16.8 billion expected
The intelligent cloud: $21.5 billion vs. $21.4 billion expected
Other personal computers: $14.2 billion vs. $14.7 billion expected
Shares of Microsoft climbed more than 4% immediately after the news.
Despite the beat in earnings per share, Microsoft’s cloud business continued to slow in the quarter. The company said its intelligent cloud segment grew 18% in the quarter, while its Azure services grew 31%. That’s down from Q2 last year, during which Intelligent Cloud and Azure saw growth of 26% and 46%, respectively.
“The next wave of computing is being born, as Microsoft Cloud turns the world’s most advanced AI into a new computing platform,” Microsoft CEO Satya Nadella said in a statement. “We are committed to helping our customers use our platforms and devices to do more with less today and create for the future in the new era of AI.”
Microsoft’s announcement follows news that the company is investing several years and billions of dollars in OpenAI in an effort to beat competitors including Amazon (AMZN) to Google (GOOG, GOOGL).
The investment is expected to help Microsoft differentiate its cloud offerings from competitors such as Amazon and Google. The company is also said to be bringing the technology to its Bing search engine, a potential threat to Google.
Just last week, however, Microsoft laid off some 10,000 employees. This move comes as the company is working on selling standard PCs. Windows OEM revenue, which is what Microsoft sells to PC makers of its operating system, fell 39% year over year.
The company continues its efforts to buy the video game giant Activision Blizzard for $ 69 billion. So far, the Federal Trade Commission, the UK’s Competition and Markets Authority, and the EU’s European Commission have filed complaints about, or works well to break, the contract.
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