Google disappoints and Microsoft reassures

Differing performances. While Microsoft’s quarterly results beat analysts’ expectations, those of Alphabet (Google) disappointed.

The Redmond firm saw its net profit climb 8.2% in the third quarter of its staggered fiscal year, to $16.73 billion. Earnings per share came in at $2.22, versus $2.19 expected by analyst consensus by FactSet.

The group’s turnover for its part jumped 19%, to 49.36 billion dollars, driven by a surge of 32% in cloud revenues, to 23.4 billion. Microsoft remains the second-largest cloud infrastructure provider behind Amazon, but the Redmond-based firm has gained market share by leveraging the notoriety of its desktop applications to promote its Azure platform to enterprises. According to research firm Gartner, the group held almost 20% of the market in 2020 – compared to only 7% in 2016 – but remains far behind the 40% of Amazon Web Services (AWS),

Catch up

Lagging behind in this area, Google’s parent company, Alphabet, is trying to catch up with major investments. The group’s activities in the cloud also jumped 45% in the first quarter, to 5.8 billion dollars, but they remain in deficit with an operating loss of 931 million dollars.

Overall, the Mountain View group saw its quarterly sales climb 23% to $68.01 billion, below analysts’ expectations. At its lowest since the end of 2020, the company’s growth was penalized by a decline in advertising spending by its customers in a context marked by high inflation and the war in Ukraine.

Alphabet even suffered a decline in its net income over the first three months of the year, to 16.44 billion dollars against 17.93 billion a year earlier. Net earnings per share came out at 24.62 dollars while the consensus anticipated 25.89 dollars.

In trading after the closing of Wall Street, Microsoft’s action jumped 4.5% to 282.40 dollars when that of Google lost 3.2% to 2,314 dollars.

Among the other members of Gafam, Facebook will publish its quarterly accounts this Wednesday evening. Amazon and Apple will reveal them on Thursday after the New York markets close.

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