Microsoft, Amazon And Apple All Surpassed Estimates With Their Quarterly Performance, But Only One Stock Ticked Higher

On Thursday, Microsoft Corporation MSFT, Amazon.com Inc AMNZ and Apple Inc AAPL issued their September quarter results. Microsoft disappointed due to a weak guidance that overshadowed its better-than-expected results. Apple surpassed Wall Street estimates with both its top and bottom lines, but its net income tanked due to one-time tax charge in Europe. Amazon reported strong growth of both its cloud and advertising business. 

Microsoft failed to impress due to soft guidance.

Due to its disappointing current quarter outlook, Microsoft’s stock had its steepest sell-off in two years with shares falling 6% on Thursday. For the December quarter, Microsoft guided for revenue in the range between $68.1 billion and $69.1 billion, falling short of LSEG’s consensus estimate of $69.83 billion. In the ongoing quarter, Microsoft is also expecting a $1.5 billion hit to income due to an expected loss from its investment in the AI startup, OpenAI. The soft guidance overshadowed its better-than-expected results, with Azure alone growing 33%, which is below its cloud rival, Google, who reported 35% YoY growth of its Google Cloud earlier on Tuesday. Microsoft reported fiscal first-quarter revenue grew 16% YoY $65.59 billion, topping LSEG’s consensus estimate of $64.51 billion. Net income grew 11% YoY to $24.67 billion

Apple’s fiscal fourth quarter results that the iPhone is still running the show.

Despite its fiscal fourth quarter results having topped Wall Street estimates on both top and bottom-line fronts, Apple’s share dropped as much as 2% during extended trading on Thursday. For the quarter ended on September 28th, revenue grew 6% YoY to $94.93 billion surpassed LSEG’s consensus estimate of $94.58 billion but net income of $14.73 billion, or 97 cents per share tanked from last year’s comparable quarter when it amounted to $22.96 billion, or $1.47 per share. However, when the one-time tax charge of $10.2 billion is excluded, adjusted earnings per share grew 12% YoY.  iPhone revenue grew 6%, bringing in $46.22 billion. Making nearly 49% of its sales, iPhone remains Apple’s biggest star. However, the iPad was the hardware line with the strongest growth of 8%, with sales rising to $6.95 billion. Mac business also grew 2% YoY $7.74 billion the ‘back-to-school’ season and the chip update of the MacBook Air. The services business grew 12% YoY, bringing in almost $25 billion to the revenue table, which is less than LSEG’s consensus estimate of $25.28 billion. As for the full fiscal year, revenue grew about 2% YoY to $391.04 billion. Apple Intelligence is expected to be an inflection point, as it finally started to roll out in October with the release of iOS 18.1.

Amazon’s third quarter results its laser focus on efficiency is paying off.

For the third quarter, Amazon reported stronger results than Wall Street expected, fueled by strength of its cloud computing and advertising businesses. Its stock went up about 5% during extended trading. Amazon reported revenue of $158.88 billion, surpassing LSEG’s consensus estimate of $157.2 billion. Amazon Web Services brought in revenue of $27.4 billion, but it continues to grow slower compared to its rivals as sales grew 19% YoY while Microsoft reported cloud growth of 33% and Google led the way with a growth rate of almost 35%.

Although its advertising business still remains a fraction the size of Google and Meta Platforms META, Amazon reported the strongest ad growth it grew its sales 19% YoY to $14.3 billion, outpacing Amazon’s core retail business. Meta followed with YoY growth rate of 18.7%, while Google reported 15% YoY growth. 

With operating income rising 56% YoY to $17.4 billion, Amazon is clearly doing job on the cost cutting and efficiency front, benefiting its bottom line as earnings amounted to $1.43 per share, surpassing LSEG’s consensus estimate of $1.14 per share.

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