Today, after the bell, Microsoft reported your taxable income for the fourth quarter of 2021, the period corresponding to the second calendar quarter of this year. Microsoft posted revenue of $ 46.2 billion in the period, along with net income of $ 16.5 billion and earnings per share of $ 2.17. The company’s revenue grew 21% compared to the prior-year quarter, while its net profit expanded 47% more in the same time period.
The company’s results exceeded expectations, which Yahoo Finance reports they were revenue of $ 44.1 billion and earnings per share of $ 1.90. Shares of the software giant fell after the news, perhaps because the company’s results are missing so-called whispering numbers; That Microsoft has traded at or near all-time highs in recent sessions puts the current 3% drop outside of business hours into context. Tech stocks were vastly weaker in regular trading today, a session in which Microsoft lost just under 1% of their value.
Microsoft is such a large company that its high-level results are barely clear, so let’s dig a little deeper.
First, Azure, Microsoft’s cloud computing platform, posted 51% revenue growth in the quarter compared to the corresponding quarter a year earlier, a figure that would drop to 45% if fluctuations were eliminated. monetary, according to the company. The 51% figure, by initial analysis, is the company’s best Azure growth result since its fiscal quarter of the third quarter of 2020, or the first calendar quarter of last year.
From that perspective, it’s hard to fault Azure’s growth over the past three months.
By selecting the rest of the company’s results, we can classify the revenue growth results of its three main divisions as follows:
- Smart Cloud – 30% growth, a figure driven in part by Azure growth.
- Productivity and Business Processes – 21% growth, led by LinkedIn (46% growth) and the Dynamics 365 CRM product (49% growth).
- More personal computing: 9% growth, driven by search growth (53%, excluding traffic acquisition costs).
The weakest points in Redmond’s broader revenue review aren’t hard to spot. Office Consumer’s revenue expanded by 18%, a figure that feels somewhat modest; Windows OEM Revenue Down 3%; and Surface revenue fell 20%.
But those negatives weren’t enough to derail the company’s aggregate growth picture and its titanic profitability. How profitable is Satya Nadella’s company? Microsoft spent $ 10.4 billion on share buybacks and dividends in its most recent quarter. Frankly, it is a somewhat confusing amount of money. And at this point, we’re a bit puzzled why Microsoft is buying back shares. Its market capitalization is just over $ 2 trillion, which means that, at best, the company can smoothly reduce its share count over time at enormous cost. Surely there is a better use for your cash?
Regardless, the company’s results indicate that the recent streak of large technology companies posting lucrative and large-scale results has not been left behind. That can help provide investor confidence for tech companies in general. Which, you know, wouldn’t be bad for startups.