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Microsoft, Alphabet, and More Earnings
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Last Updated:
April 26, 2024 at 3:16 AM EDT
The Highlights
More earnings from Big Tech companies rolled in today, with Microsoft and Alphabet among the highlights after the market close.
Intel, Snap, Roku, T-Mobile, and Western Digital also released results.
The group follows Meta Platforms, which reported better-than-expected results but shares fell on the company's plans to ramp up spending on artificial intelligence.
Alphabet
Results: Revenue of $80.5 billion, up 15% from the year-earlier period, with earnings of $1.89 a share.
Expected: Revenue of $78.7 billion with earnings of $1.51 a share.
Microsoft
Results: Revenue of $61.9 billion, up 17% from the year-earlier quarter, with a profit of $2.94 a share.
Expected: Revenue of $60.9 billion with a profit of $2.82 a share.
Intel
Results: Revenue of $12.7 billion, up 9% from a year ago, with earnings of 18 cents a share on an adjusted basis.
Expected: Revenue of $12.8 billion with earnings of 14 cents a share on an adjusted basis.
Snap
Results: Net loss of 19 cents a share with sales of $1.19 billion.
Expected: Net loss of 26 cents a share with sales of $1.12 billion.
Key Events
Latest Updates
Microsoft provided mixed guidance for the June quarter, while also forecasting accelerating demand and spending tied to the cloud and artificial intelligence.
Microsoft sees growth in the Azure business of 30% to 31% in constant currency in the June quarter, which is ahead of the Street consensus forecast of 28%. That's following 30% growth in the March quarter, which was about two percentage points ahead of Street estimates.
Microsoft CFO Amy Hood told investors on the company's Thursday afternoon conference call that she expects revenue from the company's Productivity and Business Processes segment to be up between 9% and 11% in constant currency, to between $19.9 billion and $20.2 billion, a little shy of the Street consensus as tracked by FactSet at $20.4 billion.
She sees revenue from the Intelligence Cloud segment up between 19% and 20% adjusted for currency, to between $28.4 billion and $28.7 billion, about in line with the Street consensus at $28.5 billion.
For the More Personal Computing segment, Hood's guidance calls for growth of between 10% and 13%, to between $15.2 billion and $15.6 billion, shy of the Street consensus at $15.7 billion.
Adding up the three segments suggests revenue ranging from $63.5 billion to $64.5 billion, or $64 billion at the midpoint, which is about $500 million below the former Street consensus.
Hood also said that capital expenditure will be materially higher in the June quarter compared with the $14 billion reported for the March quarter, driven by AI. And she said that the company expects to grow again in fiscal 2025 from 2024.
Hood notes that AI demand is currently running ahead of the company's computing capacity.
Microsoft shares, which had been as much as 5.5% higher in late trading, inched off a little after Hood provided her guidance, but remain about 4% higher to about $415.
Better-than-expected performance by both Microsoft Azure and Google Cloud in the March quarter are driving up shares of a variety of stocks that should benefit from what appears to be strong corporate demand for cloud computing capacity.
Microsoft Azure grew 31% in the March quarter; Google Cloud expanded 28%. Both were several percentage points better than what Wall Street expected.
Those results bode well for the largest player in the sector— Amazon Web Services—and Amazon shares are trading 3% higher after hours.
Other companies with cloud-dependent businesses are trading higher as well, with Snowflake up 3.3%, MongoDB 3.5% higher, and both Confluent and Datadog up nearly 5%.
Microsoft is 3.7% higher in late trading now, with Alphabet 13% higher.
Roku's first-quarter net loss was far better than analysts had feared, but the stock couldn't hold on to initial gains.
While the numbers were strong, traders may have honed in on comments from CEO Anthony Wood and CFO Dan Jedda in Roku's letter to shareholders.
"Looking into the second half of the year, we anticipate normal seasonal spend in Sales & Marketing for Devices, which will cause Adjusted EBITDA to slightly moderate relative to the first half of the year," they wrote.
Citi Research analyst Jason Bazinet wrote in a note to clients that the line tempers expectations for the second half of the year.
"As such, we would expect shares to trade flattish tomorrow," Bazinet writes.
Roku stock was down 2.9% in after-hours trading after initially jumping 8%.