Microsoft Stock Falls Despite December-Quarter Beat

Software kingpin Microsoft (MSFT) late Tuesday beat Wall Street’s targets for the December quarter. But Microsoft stock continued its monthlong slide in extended trading.

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The Redmond, Wash.-based company earned $2.48 a share on sales of $51.7 billion in its fiscal second quarter ended Dec. 31. Analysts expected Microsoft earnings of $2.32 a share on sales of $50.7 billion, according to FactSet. On a year-over-year basis, Microsoft earnings rose 22% while sales increased 20%.

“Solid commercial execution, represented by strong bookings growth driven by long-term Azure commitments, increased Microsoft Cloud revenue to $22.1 billion, up 32% year over year,” Chief Financial Officer Amy Hood said in a news release.

In after-hours trading on the stock market today, Microsoft stock fell 4.9%, near 274.50. During the regular session, Microsoft stock dropped 2.7% to close at 288.49. Microsoft stock hit its record high of 349.67 on Nov. 22.

Cloud Business Top Grower

Of Microsoft’s three business segments, Intelligent Cloud was the top performer in the December quarter. Revenue in the segment increased 26% year over year to $18.3 billion. The unit includes server products and cloud services such as Azure infrastructure offerings.

Microsoft’s Productivity and Business Processes unit saw sales rise 19% to $15.9 billion. The division includes Office productivity software as well as the Dynamics and LinkedIn businesses.

And lastly, Microsoft’s More Personal Computing unit posted a 15% increase in sales to $17.5 billion in the fiscal second quarter. The unit includes Windows software, Xbox video games, Surface computers, internet search and advertising.

Microsoft Stock On Several IBD Lists

Microsoft stock is on IBD’s Leaderboard list. It also is in the IBD Long-Term Leaders Portfolio.

Plus, Microsoft stock ranked first on IBD’s list of ESG stocks for investors focused on environmental, social and governance issues.

MSFT stock has been pummeled over the past month during the stock market correction.

Logitech Smashes Views

Elsewhere among PC-related stocks, Logitech International (LOGI) smashed expectations for the December quarter.

Logitech earned an adjusted $1.55 a share on sales of $1.63 billion in its fiscal third quarter ended Dec. 31. Analysts had expected earnings of $1.23 a share on sales of $1.46 billion.

On a year-over-year basis, Logitech earnings fell 37% while sales dropped 2%. It faced difficult comparisons to the year-earlier period when work-from-home and learn-at-home trends from the Covid pandemic fueled sales of PC accessories like keyboards, mice and webcams.

“Work-from-home has become a long-term secular trend,” Logitech Chief Executive Bracken Darrell told Investor’s Business Daily. Even as many workers shift to a hybrid work environment after the pandemic passes, they’ll still want to keep upgrading their home computer systems, he said.

Logitech stock rose 4.5% to 77.78 on the news Tuesday.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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