Since this Q3 earnings season is even more closely watch than usual because of the implications for corporate earnings outlooks into the new year, and the possible signs of consumer demand slowdown that may emerge (which in turn has implications for the path of continued Fed rate hikes), this is the first of a couple of quick updates we will send exclusively to clients.
Microsoft Q1 Earnings Highlights:
- Revenue And EPS Beat, Cloud Revenue Up 24%, but the company posted its?weakest quarterly revenue growth in five years, throttled by the surging U.S. dollar and a slump in sales of Windows software to personal-computer makers. Sales in the first quarter, which ended Sept. 30, rose 11% to $50.1 billion, the company said yesterday. Net income was $17.6 billion, or $2.35 a share
- While both?numbers topped analysts’ average estimates, revenue from Microsoft’s closely watched Azure cloud-computing services decelerated to 35% - partly because of foreign-currency exchange rates. What's more, MSFT?gave a lacklustre forecast for sales growth in Azure, a closely watched measure of corporate demand. Revenue growth for Azure, which lets companies run and store software applications, will drop by five percentage points in the current period from the prior quarter, Chief Financial Officer Amy Hood said on a conference call
- Shares sank postmarket, sliding as much as 8.1% to $230.39 in extended trading following the company’s forecast. They had risen to $250.66 at the close in New York.
Alphabet Q3 Earnings Highlights:
- Misses On Q3 Revenue, EPS; YouTube, Network Revenue Decline
- Google’s?advertising?juggernaut, which had largely dodged the digital-ad slowdown that hit rivals earlier this year, is no longer immune. Alphabet said?third-quarter sales, excluding payments to distribution partners, were $57.27 billion. That compared with the average analyst projection for $58.18 billion.
- Alphabet?shares slid 4% after hours. The?search and ads business slowdown is clearly a bad omen?for digital advertising at large
Meta?reports tonight Asia time, and?also slid 4%?after hours overnight.
