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Results beat analyst estimates on both Revenue and EPS (Non GAAP, after announcing it plans to reduce its workforce by 10K roles in the current quarter).
Revenues @ US$ 52.75Bn have grown 2% YoY from Q4 2022, with the productivity & business processes segment growing 7% @ US$ 17Bn, intelligent cloud segment growing 18% @ US$ 21Bn and personal computing segment falling -19% @ US$ 14Bn
EPS (GAAP) of US$ 2.2 per share, misses analyst expectations of US$ 2.3, have fallen -11% YoY.
The company's forecast for the current quarter was below expectations with lower revenues expected from the personal Computing Segment and from Azure (intelligent cloud segment).
Illustration of key metrics:
According to a data from Refinitiv, analysts expect earnings to bottom out between Q4 2022 and Q1 2023. It is possible that the lower guidance and under performance is due to the larger growth environment. Risk factor: Cash flow from operating activities have fallen -22.8% YoY and -51% QoQ. This could be a company specific problem and could adversely impact stock prices unless this trend reverses in Q1 and Q2 of this year.
Stock prices are lower by 30% from its Nov 2021 high of 350 and is edging closer towards the 200 day moving average. In 2022, all 4 attempts to break out above it has ended in a sharp reversal. The company trades at a PE (TTM) of 26, which is in line with its 5 year average.
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