Microsoft announces strong revenue forecast, shares rise

Microsoft on Tuesday projected revenue for the first quarter of 2021 largely above what analysts on Wall Street had estimated, influenced in part by expected performance for the Intelligent Cloud unit.

The estimate calmed market concerns about the company’s growth, after the announcement of results for the quarter ended in December, which initially triggered a negative reaction in Microsoft’s stock trading after the closing.

The actions, however, reversed course after the release of the projections.

Microsoft estimates Intelligent Cloud revenue will reach $18.75 billion to $19 billion in the current quarter, driven by “strong growth” in its Azure platform. That compares with an analyst estimate on Wall Street of $18.15 billion, according to Refinitiv data.

Other units also have strong revenue estimates.

In addition, the More Computing unit is expected to have revenue of $14.15 billion to $14.45 billion this quarter, above Wall Street’s projections of $13.88 billion.

The Productivity and Business Processes unit is expected to report revenue of $15.6 billion to $15.85 billion compared to analysts’ estimate of $15.72 billion.

Microsoft’s net income for the last quarter rose to $18.77 billion, or $2.48 per share, from $15.46 billion, or $2.03 per share, a year earlier.

Revenue rose to $51.73 billion in the quarter ended December, from $43.08 billion a year earlier. Analyst forecasts averaged $50.88 billion, according to Refinitiv data.

Despite total revenue beating estimates, Azure’s revenue growth of 46% was only in line with analyst expectations, as compiled by Visible Alpha.