Microsoft Corporation MSFT dampened expectations that cloud computing demand would ease the flagging PC market at home First Quarter Results Phone call.
What happened: The Redmond, Wash.-based tech giant said revenue growth for its cloud computing platform — Azure — fell 5 percentage points in the current quarter, net of the impact of currency fluctuations.
Currency-neutral revenue from Azure and other cloud services grew 35% and 42%, respectively, in the first quarter, according to Microsoft CFO Amy Hoodthat was one percentage point less than expected.
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Hood said the lower revenue growth was due to “the continued moderation in Azure consumption growth as we help customers optimize current workloads while prioritizing new workloads.”
chairman Satya Nadella Speaking of cloud computing, Microsoft said that in the current period, Microsoft will “optimize for long-term customer retention, but will be proactive in helping them optimize their spend, which I think is right for us as a company — in the interests of our shareholders over the long term.”
Why it matters: Revenue for the Microsoft cloud segment was $25.7 billion in the first quarter, up 24% year over year.
Meanwhile, personal computing revenue declined slightly year over year to $13.3 billion for the same period.
Overall, Microsoft reported earnings per share of $2.35, topping analyst estimates of $2.32 Benzinga Pro data.
Going forward, Microsoft expects revenue to be driven by Azure, with expected revenue growth driven by consumption with “some impact from Q1 trends.”
Price promotion: Microsoft shares closed 6.7% lower at $233.85 in after-hours trading after closing 1.4% higher at $250.66 in the regular session,
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