Microsoft and Alphabet with better results but with mixed after-hours price behavior

Microsoft Q1 2024 earnings beat analyst expectations

• EPS $2.99 vs est. $2.24
• Rev. $56.5b, est. $54.54b
• Productivity Rev $18.59b, est. $18.29b
• Intelligent cloud Rev. $24.26b, est. $23.61b
• More personal computing Rev. $13.67b, Est. $12.89b
• Returned $9.1b to holders

Microsoft reported strong financial results for the first quarter of fiscal year 2024, beating analyst expectations on both revenue and earnings. Earnings per share (EPS) were $2.99, compared to the consensus estimate of $2.24. Revenue was $56.5 billion, above the consensus estimate of $54.54 billion.

All three of Microsoft's business segments posted solid growth this quarter. Productivity and Business Process revenues increased 9% year-over-year to $18.59 billion, driven by strong growth in Office 365 and Microsoft Teams. Intelligent Cloud revenue increased 11% year-over-year to $24.26 billion, driven by strong growth in Azure. More Personal Computing revenue increased 6% year-over-year to $13.67 billion, driven by strong growth in gaming and Surface devices. Microsoft also returned $9.1 billion to shareholders this quarter in the form of dividends and stock repurchases.

Overall, Microsoft's Q1 2024 results were very strong, and the company is well-positioned for continued growth in the coming quarters. The company's stock price rose more than 5% in after-hours trading.

Alphabet Q3 2023 earnings beat analyst expectations on revenue but miss on earnings

• EPS $1.55, Est. $1.45.
• Rev. $76.69b, Est. $75.54b
• Google services Rev. $67.99b, est. $66.89b
• Google Ad Rev. $59.65b, est. $58.94b
• YouTube Ads Rev. $7.95b, est. $7.8b.
• Google Cloud Rev. $8.41b, est. $8.6b
• Google other Rev. $8.34b, est. $7.94b
• Operating Income $21.34b, est. $21.44b

Alphabet reported strong financial results for the third quarter of 2023, beating analyst expectations on revenue but missing on earnings. Earnings per share (EPS) were $1.55, compared to the consensus estimate of $1.45. Revenue was $76.69 billion, above the consensus estimate of $75.54 billion which was 11% YoY growth. 

Google Services revenue grew 22% year-over-year to $67.99 billion, driven by strong growth in advertising revenue and cloud computing revenue. Google Advertising revenue grew 22% year-over-year to $59.65 billion, driven by increased ad spending on YouTube and in Google Search. Google Cloud revenue grew 45% year-over-year to $8.41 billion, driven by increased demand for cloud computing services. Other revenue grew 12% year-over-year to $8.34 billion.

Ruth Porad pointed to meaningful growth in Search and YouTube. Cloud revenue grew 23% YoY but missed market expectations. Operating income was aided by AI-driven product innovations. 

Overall, Alphabet's Q3 2023 results were good on revenue, but the company missed on operating earnings due to a weaker result from Google Cloud. As a result, Alphabet's stock price fell over 5% in after-hours trading.