microsoft corp’s profit declined more than 12 in the holiday season before executives decided to lay off thousands of workers but shares gained after its quarterly report tuesday as cloud growth beat expectations microsoft msft reported fiscal secondquarter earnings of 1643 billion or 220 a share a decline from 248 a share a year ago the company also reported that severance impairment and leaseconsolidation costs cost it 12 cents a share which would lead to adjusted earnings of 232 a share microsoft executives did not provide adjusted earnings a year ago and typically stick to gaap profit readings revenue increased to 5275 billion from 517 billion in the holiday quarter of 2022 analysts on average expected earnings of 229 a share on sales of 5299 billion according to factset microsoft shares gained more than 4 in afterhours trading immediately following the release of the results after closing with a 02 decline at 24204 microsoft shares tend to react more solidly following the company’s guidance which executives usually provide in a conference call that is scheduled for 530 pm eastern time tuesday microsoft’s forecast takes on extra importance this quarter as analysts believe that businesses slowed down deals at the end of 2022 to cut costs and for other reasons and wall street will want to know if microsoft expects any deals that didn’t close before the end of the year will be included in the current quarter’s results microsoft executives told investors at the end of the last fiscal year that they expect doubledigit percentage growth in revenue and operating margins but a lot has happened since then microsoft announced thousands of layoffs last week part of a wave of job cuts from big tech companies that increased their workforces at a rapid pace in the early years of the covid19 pandemic wall street analysts believed the move signaled concerns about revenue growth ‘it is an employer’s market’ tech layoffs may have turned the great resignation into the great recommitment “we expect that the head count reduction announcement … will likely be accompanied by a lower revenue outlook for the second half of the fy but the actions taken by the company are an illustration of how microsoft can dynamically adjust its cost base to preserve eps and free cash flow given the macro choppiness” evercore isi analysts wrote in a preview of the earnings while maintaining an outperform rating and 280 target price on the stock microsoft executives hope to provide a rosier outlook with other deals the day before its earnings report the company officially announced a longexpected third investment in chatgpt creator openai which includes plans to incorporate the technology into services such as microsoft’s azure cloudcomputing offering and bing search engine microsoft is also still in the process of acquiring videogamepublishing giant activision blizzard inc atvi for 69 billion though it is facing pushback from regulators worldwide opinion microsoft’s big move in ai does not mean it will challenge google in search “we are particularly keen for updates on this deal and would pay special attention to what sorts of concessions microsoft is prepared to make at this point and at what point the concessions make the deal unattractive to shareholders” macquarie research analysts wrote of the activision acquisition while maintaining a neutral rating but decreasing their price target to 232 from 234 microsoft reported cloud revenue of 215 billion up from 1833 billion a year ago and narrowly topping the average analyst estimate of 2143 billion according to factset azure grew 31 while analysts on average were expecting 305 growth from the cloudcomputing product microsoft does not provide full revenue or profit figures for azure even though amazoncom inc amzn and alphabet inc googl goog provide such results for their rival cloud products for more the cloud boom has hit its stormiest moment yet and it is costing investors billions microsoft’s personalcomputer segment recorded 142 billion in revenue down from 1747 billion in the previous holiday season and missing the average analyst estimate of 1476 billion pc shipments suffered their worst decline ever recorded in the holiday season according to thirdparty analyses after a boom in pc sales during 2020 and 2021 opinion the pc boom and bust is already ‘one for the record books’ and it isn’t over microsoft’s enterprisesoftware business had sales of 17 billion up from 1594 billion a year ago and beating the factset analyst consensus of 1679 billion microsoft shares have declined 184 in the past 12 months as the sp 500 index spx has dropped 89 and the dow jones industrial average djia which counts microsoft as one of its 30 components has declined 21