Microsoft’s Azure growth slips below 50% for first time

The Microsoft store is pictured in the Manhattan borough of New York City, New York, U.S., June 26, 2020. REUTERS/Carlo Allegri

(Reuters) – Microsoft Corp’s flagship cloud computing business Azure reported sales growth of under 50% for the first time ever on Wednesday, sending the tech giant’s shares down 3%, even as it beat quarterly revenue estimates.

Microsoft said revenue in its Intelligent Cloud segment rose 17% to $13.4 billion, with 47% growth in Azure. Analysts on average had expected revenue of $13.09 billion, according to IBES data from Refinitiv.

Revenue from its personal computing division, the largest by sales, rose 14% to $12.9 billion, beating analysts’ estimates of $11.46 billion. The unit includes Windows software, Xbox gaming consoles, online search advertising and Surface personal computers.

Net income fell to $11.20 billion, or $1.46 per share, from $13.19 billion, or $1.71 per share, a year earlier.

Revenue rose 13% to $38.03 billion in the fourth quarter ended June 30, beating estimates of $36.5 billion, according to IBES data from Refinitiv. (bit.ly/3jxrriP)

Reporting by Stephen Nellis in San Francisco and Munsif Vengattil in Bengaluru; Editing by Maju Samuel

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