Alphabet and Microsoft results beat Wall Street expectations

Alphabet's second-quarter profit exceeded forecasts, while Microsoft beat estimates for its fiscal fourth-quarter sales and profits

Microsoft CEO Satya Nadella. Its fiscal fourth-quarter sales and profits performance is attributed to growth in its cloud computing and office software businesses. File picture: Sean Gallup/Getty

Tue, 25 Jul, 2023 - 23:04

Alphabet’s second-quarter profit exceeded Wall Street expectations on Tuesday night and the Google parent announced that its long-time chief financial officer Ruth Porat would assume a new role while the company sought a new finance chief.

Alphabet’s results were helped by steady demand for its cloud services and a rebound in advertising. The shares jumped nearly 5% in after-market trading.

Ms Porat, hired in 2015, is one of Silicon Valley’s most prominent female executives and oversaw tremendous growth at Alphabet. She will become chief investment officer and president starting on September 1.

Advertisers, who contribute a big share of Alphabet's revenue, have pulled back on spending precious dollars on untested platforms, helping the Google parent as well as Facebook owner Meta Platforms.

Google Cloud, which is among the biggest cloud service providers, is expected to benefit from growth driven by strong adoption of artificial intelligence tools.

The company reported net profit of $1.44 (€1.30) per share for the April-June period, compared with estimates of $1.34 per share.

Revenue for the quarter stood at $74.6bn, compared with estimates of $72.82bn, according to Refinitiv data.

Meanwhile, Microsoft beat Wall Street estimates for its fiscal fourth-quarter sales and profits, driven by growth in its cloud computing and office software businesses.

Revenue rose to $56.2bn in the quarter ended June, compared with analysts’ consensus estimate of $55.5bn, according to Refinitiv. Net income was $2.69 per share, compared with estimates of $2.55 per share.

Shares dropped 2% in after-market trading.

Microsoft’s Intelligent Cloud unit, which houses the Azure cloud computing platform, grew to $24bn, compared with analysts’ estimate of $23.8bn.

Azure revenue rose 26%, higher than a 25.2% growth estimate from Visible Alpha.

The company does not break out the absolute revenue figure for Azure, the part of Microsoft's business best situated to capitalize on booming interest in artificial intelligence.