Microsoft (MSFT) posted better-than-expected first quarter earnings late Tuesday but noted slowing growth in its key Azure cloud unit while seeing an ongoing impact from the strength of the U.S. dollar.
Microsoft said revenues for Azure, its flagship cloud division, rose 35% from last year, slowing notably from its prior quarter gains in the mid to high 40-percent range as companies pulled back on digital infrastructure spending and the dollar continued its 2022 climb.
Microsoft earned just over half of its $168.1 billion in 2021 revenues from overseas markets, according to the group's latest annual report, with international growth outpacing domestic by around 300 basis points.
Overall group revenues rose 10.5% to $50.1 billion for the three months ending in September, Microsoft's fiscal first quarter, topping analysts' estimates of a $49.61 billion tally.
Microsoft's bottom fell 15% to $17.3 billion while adjusted earnings fell 13.5% from last year to $2.35 per share, topping the the Street consensus forecast of $2.30 per share.
“In a world facing increasing headwinds, digital technology is the ultimate tailwind,” said CEO Satya Nadella. “In this environment, we’re focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way."
Microsoft shares were marked 2.5% lower in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $244.30 each.
In terms of reporting segments, Productivity and business division revenues rose 9% to $16.5 billion, Microsoft said, while Intelligent Cloud revenues were up 24% to $25.7 billion. More Personal Computing revenues rose only 3% to $13.3 billion.
