Microsoft shares dropped almost 7 per cent in after-hours trading on Tuesday after the company reported softer earnings from its cloud division in its fiscal 2024 fourth quarter.
Revenue in Microsoft’s intelligent cloud division, which includes Azure public cloud, increased 19 per cent annually to $28.5 billion in the three months ending June 30, lower than the $28.6 billion consensus of analysts surveyed by StreetAccount.
Industry analysts said that the smaller-than-expected cloud revenue growth figures indicate that “Azure may have limited growth potential in the short term”.
Without substantial revenue from Azure, Microsoft's ability to invest and grow in all areas is limited, particularly in emerging technologies such as artificial intelligence, said Thomas Monteiro, senior analyst at Investing.com.
“Despite Microsoft's best-in-breed product offering and unmatched revenue diversification, it still can't grow fast enough to garnish the capital needed to grow across all segments, AI included, without a significant boost from Azure,” Mr Monteiro told The National.
“That's even more important when we consider the current pressure on the company's margins, which has led it to halt head-count growth and invest only in top-level talent.”
Sales from Azure and other cloud services, which Microsoft does not report in dollars, grew by about 29 per cent.
Since 2016, Microsoft has committed to building Azure into an AI supercomputer for the world, serving as the foundation of its vision to democratise AI as a platform.
“Considering that Apple has now joined the AI race and Alphabet is taking significant steps towards a diversified AI offering similar to Microsoft's, the company's unchallenged leadership in the segment up until now may be growing thin,” Mr Monteiro said.
After the earnings announcement, Microsoft’s stock was trading 6.25 per cent down at $396.50 a share at 5.40pm New York time.
Earlier, it closed 0.89 per cent down at $422.92, giving the company a market cap of $3.14 trillion.
Its net profit jumped 10 per cent on an annual basis to $22 billion in the June quarter. Microsoft’s financial year ends in June.
Revenue during the April-June period jumped 15 per cent to nearly $64.7 billion, exceeding analysts' expectations of $64.3 billion.
For the full financial year, the company’s net income surged 22 per cent to $88.1 billion, while revenue increased 16 per cent to $245.1 billion.
Microsoft projects its revenue for the first quarter of the 2025 fiscal year, ending on September 30, to be between $63.8 billion and $64.8 billion, representing a 13.8 per cent increase at the midpoint of the range.
It expects the first-quarter Azure revenue growth between 28 per cent and 29 per cent and a faster growth in the second half of the fiscal year, Amy Hood, executive vice president and chief financial officer of Microsoft, said during the earnings call.
“Our strong performance this fiscal year speaks both to our innovation and to the trust customers continue to place in Microsoft," said Satya Nadella, chairman and chief executive of the company.
“As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era."
The company's productivity and business processes division, which includes its Microsoft Office business and revenue from LinkedIn, surged 11 per cent to $20.3 billion in the June quarter.
LinkedIn revenue increased almost 10 per cent annually. Microsoft did not give a dollar figure for its LinkedIn revenue and did not disclose the number of users.
Subscribers to Microsoft 365 Consumer – a bundle of various apps – increased to 82.5 million at the end of the last quarter, up 2.1 per cent on a quarterly basis, the company said.
Sales in the personal computing division surged 14 per cent to $15.9 billion in the quarter.
Search and news advertising revenue excluding traffic acquisition costs increased 19 per cent, while devices revenue decreased 11 per cent.
Microsoft also returned $8.4 billion to shareholders in the form of share repurchases and dividends in the last quarter.
The company spent more than $8 billion on research and development, about 12.4 per cent of its total sales in the quarter.
England's all-time record goalscorers:
Wayne Rooney 53
Bobby Charlton 49
Gary Lineker 48
Jimmy Greaves 44
Michael Owen 40
Tom Finney 30
Nat Lofthouse 30
Alan Shearer 30
Viv Woodward 29
Frank Lampard 29
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Final scores
18 under: Tyrrell Hatton (ENG)
- 14: Jason Scrivener (AUS)
-13: Rory McIlroy (NIR)
-12: Rafa Cabrera Bello (ESP)
-11: David Lipsky (USA), Marc Warren (SCO)
-10: Tommy Fleetwood (ENG), Chris Paisley (ENG), Matt Wallace (ENG), Fabrizio Zanotti (PAR)
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
Pox that threatens the Middle East's native species
Camelpox
Caused by a virus related to the one that causes human smallpox, camelpox typically causes fever, swelling of lymph nodes and skin lesions in camels aged over three, but the animal usually recovers after a month or so. Younger animals may develop a more acute form that causes internal lesions and diarrhoea, and is often fatal, especially when secondary infections result. It is found across the Middle East as well as in parts of Asia, Africa, Russia and India.
Falconpox
Falconpox can cause a variety of types of lesions, which can affect, for example, the eyelids, feet and the areas above and below the beak. It is a problem among captive falcons and is one of many types of avian pox or avipox diseases that together affect dozens of bird species across the world. Among the other forms are pigeonpox, turkeypox, starlingpox and canarypox. Avipox viruses are spread by mosquitoes and direct bird-to-bird contact.
Houbarapox
Houbarapox is, like falconpox, one of the many forms of avipox diseases. It exists in various forms, with a type that causes skin lesions being least likely to result in death. Other forms cause more severe lesions, including internal lesions, and are more likely to kill the bird, often because secondary infections develop. This summer the CVRL reported an outbreak of pox in houbaras after rains in spring led to an increase in mosquito numbers.
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Moonfall
Director: Rolan Emmerich
Stars: Patrick Wilson, Halle Berry
Rating: 3/5
Top tips
Create and maintain a strong bond between yourself and your child, through sensitivity, responsiveness, touch, talk and play. “The bond you have with your kids is the blueprint for the relationships they will have later on in life,” says Dr Sarah Rasmi, a psychologist.
Set a good example. Practise what you preach, so if you want to raise kind children, they need to see you being kind and hear you explaining to them what kindness is. So, “narrate your behaviour”.
Praise the positive rather than focusing on the negative. Catch them when they’re being good and acknowledge it.
Show empathy towards your child’s needs as well as your own. Take care of yourself so that you can be calm, loving and respectful, rather than angry and frustrated.
Be open to communication, goal-setting and problem-solving, says Dr Thoraiya Kanafani. “It is important to recognise that there is a fine line between positive parenting and becoming parents who overanalyse their children and provide more emotional context than what is in the child’s emotional development to understand.”
UAE SQUAD
UAE team
1. Chris Jones-Griffiths 2. Gio Fourie 3. Craig Nutt 4. Daniel Perry 5. Isaac Porter 6. Matt Mills 7. Hamish Anderson 8. Jaen Botes 9. Barry Dwyer 10. Luke Stevenson (captain) 11. Sean Carey 12. Andrew Powell 13. Saki Naisau 14. Thinus Steyn 15. Matt Richards
Replacements
16. Lukas Waddington 17. Murray Reason 18. Ahmed Moosa 19. Stephen Ferguson 20. Sean Stevens 21. Ed Armitage 22. Kini Natuna 23. Majid Al Balooshi
The biog
Nickname: Mama Nadia to children, staff and parents
Education: Bachelors degree in English Literature with Social work from UAE University
As a child: Kept sweets on the window sill for workers, set aside money to pay for education of needy families
Holidays: Spends most of her days off at Senses often with her family who describe the centre as part of their life too
Coming soon
Torno Subito by Massimo Bottura
When the W Dubai – The Palm hotel opens at the end of this year, one of the highlights will be Massimo Bottura’s new restaurant, Torno Subito, which promises “to take guests on a journey back to 1960s Italy”. It is the three Michelinstarred chef’s first venture in Dubai and should be every bit as ambitious as you would expect from the man whose restaurant in Italy, Osteria Francescana, was crowned number one in this year’s list of the World’s 50 Best Restaurants.
Akira Back Dubai
Another exciting opening at the W Dubai – The Palm hotel is South Korean chef Akira Back’s new restaurant, which will continue to showcase some of the finest Asian food in the world. Back, whose Seoul restaurant, Dosa, won a Michelin star last year, describes his menu as, “an innovative Japanese cuisine prepared with a Korean accent”.
Dinner by Heston Blumenthal
The highly experimental chef, whose dishes are as much about spectacle as taste, opens his first restaurant in Dubai next year. Housed at The Royal Atlantis Resort & Residences, Dinner by Heston Blumenthal will feature contemporary twists on recipes that date back to the 1300s, including goats’ milk cheesecake. Always remember with a Blumenthal dish: nothing is quite as it seems.
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
