Microsoft Corporation, Intel Corporation Shares Fall On Earnings Reports

Microsoft and Intel released their latest earning reports after closing bell tonight. Microsoft reported adjusted earnings of 73 cents per share on $22.1 billion in GAAP revenue and $23.5 billion in non-GAAP revenue, compared to the analyst estimates of 70 cents per share on $23.7 billion in revenue. In the same quarter a year ago, the Windows maker reported 62 cents per share and $22.1 billion in sales.

Intel posted non-GAAP earnings of 66 cents per share on $14.8 billion in revenue, compared to Wall Street’s expectations of 65 cents per share on $14.8 billion in revenue. In the same quarter a year ago, the chip maker reported 54 cents per share and $13.7 billion in revenue. Intel had guided for 60 cents to 70 cents per share in adjusted earnings, 51 cents to 61 cents per share in GAAP earnings and revenue of between $14.3 billion and $15.3 billion.

Microsoft shares fall

Microsoft’s GAAP earnings rose to 61 cents per share from 47 cents per share in the same quarter a year ago. The company said demand for cloud-based services drove the Commercial Cloud annualized revenue run rate past $15.2 billion. Productivity and Business Processes revenue rose 22% to $8 billion, while Intelligent Cloud revenue grew 11% to $6.8 billion. More Personal Computing revenue fell 7% to $8.8 billion.

Morgan Stanley analysts had expected the company’s Commercial Cloud business to surpass a run rate of $15 billion in annualized revenue. They projected $3.83 billion in Commercial Cloud revenue, $7.79 billion in Productivity and Business Processes, and $6.57 billion in Intelligent Cloud revenue.

Morgan Stanley analysts had high conviction going into the company’s third quarter report and said earlier this month that they feel the report could be the tipping pointed needed to get it moving back in an upward trajectory. The phone hardware business is mostly out of consensus numbers now, and PC shipments have been improving steadily

Microsoft shares ticked lower by as much as 1.86% to $67 in after-hours trades tonight.

Intel boosts earnings, revenue guidance

Intel’s GAAP earnings rose to 61 cents per share from 42 cents per share last year. Client Computing Group revenue rose 6% to $8 billion, while Data Center Group revenue ticked higher by 6% to $4.2 billion. Internet of Things revenue grew 11% to $721 million, while Non-volatile Memory Solutions Group revenue grew 55% to $866 million. Intel Security Group revenue ticked downward by 1% to $534 million, and Programmable Solutions Group revenue grew 18% to $425 million.

On the earnings call tonight, the chip maker may provide an update on the acquisition of Mobileye, which is expected to push it ahead in the coveted area of autonomous driving.

For the second quarter, Intel projects revenue of $14.4 billion, plus or minus $500 million, and adjusted earnings of about 68 cents per share. The chip maker raised its full-year outlook for revenue by $500 million and its earnings outlook by 5 cents per share, bringing it to $2.85 per share.

Shares of Intel fell by as much as 3.42% to $36.15 in extended trading tonight.

Updated on Feb 1, 2020, 10:16 pm