Microsoft reported better-than-expected earnings and revenue for the fiscal second quarter. The stock dropped in extended trading.
Here’s how the company did:
Revenue increased by 20% year over year in the quarter, according to a statement, compared with almost 22% growth in the previous quarter.
Microsoft shares have declined 13% since the start of the year, amid a broad selloff in technology stocks as investors brace for rising interest rates.
During the quarter, Microsoft released Windows 11 as the successor to Windows 10 and introduced the $249 Surface Laptop SE for school use that runs a special version of Windows 11. The company also announced the acquisition of Ally.io, whose software helps companies stay on top of key goals.
Microsoft announced plans earlier this month to acquire Activision Blizzard, the publisher behind Call of Duty, for $68.7 billion, the largest deal in the company’s 46-year history.
Guidance will be particularly important as investors look for indications of how supply chain constraints and inflation are factoring into future revenue and profit. Analysts polled by Refinitiv are expecting Microsoft to forecast $48.23 billion in revenue for the fiscal third quarter, implying 15.6% growth.
Executives will discuss the results and issue guidance on a webcast that will be broadcast over Microsoft’s Teams app starting at 5:30 p.m. ET.
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