Forecast disappoints stock market
Microsoft with profit slump
In its traditional business with the Windows operating system, Microsoft has recently been hit hard by the downturn in the PC market. However, the cloud business remained a ray of hope. However, growth is also weakening there.
Software giant Microsoft struggled at the end of the year in the face of high inflation and recession worries and earned significantly less. In the three months to the end of December, net profit fell by twelve percent year-on-year to 16.4 billion dollars (15.1 billion euros). Turnover increased by two percent to 52.7 billion dollars - the weakest growth for more than six years.
Overall, however, the quarterly figures were in line with expectations. Revenue in the important cloud business was also slightly higher than Wall Street analysts had expected. In an initial reaction, the share price rose by around four percent in after-hours trading on Tuesday.
After the forecast for the current quarter, however, the share price turned negative. Among other things, Microsoft predicted that the growth of the Azure cloud platform would slow by four to five percentage points. Azure is a key growth driver for the Group and was a bright spot in the past quarter with an increase of a good 30 percent.
Microsoft announced last week that it would be laying off around 10,000 employees. After other tech companies such as the Facebook group Meta, Twitter and Amazon had already resorted to major job cuts, the wave of redundancies has now reached the Windows group. The cuts and other restructuring measures cost Microsoft 1.2 billion dollars. Nevertheless, the company wants to expand its commitment to OpenAI, the developer of the writing AI software ChatGPT, with a "multi-billion" investment.
Microsoft CEO Satya Nadella emphasized the importance of software with artificial intelligence for the future. "In time, every app will be an AI app," he said in a conference call with analysts after presenting the quarterly figures. Microsoft wants to integrate OpenAI technology deeply into its cloud platform.
Meanwhile, Microsoft's Windows business has been hit by the downturn in the PC market. Business with sales of the operating system to computer manufacturers shrank by 39 percent last quarter. And in the current quarter, the Group believes that another decline of a similar magnitude is possible.
There were also declines in the games business relating to the Xbox console. However, Microsoft passed the 120 million mark for active users of its Game Pass subscription service, which allows video games to be played online.
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