Microsoft gave an upbeat sales forecast for the fiscal year that just began, easing investor concerns about growth that had flared up following a lackluster fourth-quarter earnings report.
Microsoft Corp. gave an upbeat sales forecast for the fiscal year that just began, easing investor concerns about growth that had flared up following a lackluster fourth-quarter earnings report. Shares jumped more than 5 per cent in late trading, reversing earlier declines.
Microsoft said it is attracting more large deals to its Azure cloud-computing software and moving clients to pricier versions of Office cloud programs. The company’s expenses will decelerate as the year goes on and as the pace of hiring slows after it adds a planned 11,000 workers in the current period.
Earlier, the company reported fourth-quarter sales and profit that fell short of analysts’ projections, held back by unfavorable currency exchange rates and weaker demand for cloud-computing services, personal-computer software and advertising on its online properties. “Post-Memorial Day, things started getting slower and you started hearing more cautious buying behavior and longer sales cycles,” Wood said.
Commercial bookings, a measure of future sales to corporate customers, were “significantly” better than the company expected, rising by 25 per cent, an indication corporate demand for Microsoft software remained strong in the quarter, she said. Microsoft also recorded US$113 million in severance payments in the recent period. Earlier this month, Microsoft said it cut less than 1 per cent of its 180,000-person workforce, affecting groups such as consulting and customer solutions, but said it planned to finish the current fiscal year with increased headcount. The company has also eliminated many open jobs and slowed hiring including in units that make Azure, Windows, Office and security software.
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