Microsoft topped analysts’ estimates for second-quarter revenue, helped by brisk quarterly growth in its cloud and corporate-software businesses, while a tax charge caused the company to report a net loss.
The software maker took a $13.8 billion charge related to taxes owed on overseas cash, a result of recent changes to US tax law. The net loss in the second quarter, which ended December 31, was $6.27bn, or 82 cents a share, Microsoft said Wednesday.
Sales of Azure cloud-computing services almost doubled as businesses increasingly seek to run applications and store data in Microsoft’s data centres. Chief executive Satya Nadella is adding machine learning and data-analysis features to Azure, seeking to woo customers from market leader Amazon.com. The company is also switching more customers to online subscription versions of productivity programs like Word and Excel, helping buoy Office 365 revenue by 41 per cent.
"Office is continuing on its merry way, moving customers to Office 365," said Mark Moerdler, an analyst at Sanford C Bernstein. "And Azure is continuing to chug along."
Excluding the charge, second-quarter profit was 96 cents, compared with an average analyst projection of 86 cents, according to data compiled by Bloomberg. Sales in the quarter climbed 12 per cent to $28.9bn, exceeding the average analyst estimate of $28.4bn.
The company’s shares were little changed in extended trading following the report, after closing at a record $95.01 in New York. Microsoft stock jumped 15 per cent in the December quarter, outpacing the 6.1 per cent gain in the Standard & Poor’s 500 Index.
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The Washington-based company has rolled out services that add artificial intelligence conversations and language understanding into its cloud programs. It also started offering customers the ability to host their workloads in France, bringing the number of regional options for data-centre services to 42, and signed a seven-year deal to be the primary cloud provider for Chevron.
The company will boost capital expenditures as it continues to invest in projects like data-center capacity for these businesses, Microsoft said on a conference call with analysts.
As Microsoft’s new data centres come online and become more efficient, their profitability increases. Mr Moerdler expects Azure’s expansion to continue for the next few years and provide a significant source of revenue and earnings growth for Microsoft.
Growth in Azure was slightly faster than in both the previous quarter and the year-earlier period. Analysts and investors following Microsoft have wondered if Azure’s growth would begin to trail off as the overall revenue number gets larger. "I do, in general, expect our strong performance in Azure to continue," said the chief financial officer Amy Hood.
In the second quarter, commercial cloud sales rose to $5.3bn, a gain of 56 per cent from $3.4bn in the year-earlier quarter. Gross margin for that business widened to 55 per cent, up 7 points compared with a year earlier.
KeyBanc analysts wrote in a note earlier this month that Microsoft will reach $40bn in total cloud revenue in 2019. The bank estimated Microsoft’s Azure gained market share from Amazon Web Services in the most recent quarter.
As of June 30, almost $128bn of the Microsoft's cash and short-term investments were held overseas. In December, Congress passed a sweeping tax overhaul that scrapped a previous system that let companies defer US income taxes on foreign earnings until they returned that income to the US. Now companies will have to pay taxes on accumulated foreign income - cash at a tax rate of 15.5 per cent and less liquid assets at a rate of 8 per cent.
While Microsoft is accounting for the entire tax charge in the recent period, it will pay the bill over time - companies have eight years to do so. Ms Hood declined to say how much cash Microsoft would bring back to the US, or when, or what the company might do with it.
Total revenue in the company’s More Personal Computing division, which includes the Windows operating system, was $12.2bn, beating the $11.98bn average estimate of four analysts polled by Bloomberg. Revenue from Surface hardware was little changed from a year ago, and gaming revenue rose 8 per cent, fuelled by the release of the high-end Xbox One X console. Productivity sales, mainly Office software, climbed 25 per cent to $8.95bn. Analysts had estimated $8.86bn.
For the fiscal third quarter, the company forecast More Personal Computing revenue of as much as $9.4bn, and up to $8.8bn for the productivity unit. Intelligent Cloud, which consists of Azure and server software, will post sales of as much as $7.75bn, Ms Hood said.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Coffee: black death or elixir of life?
It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?
Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.
The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.
The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.
Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver.
The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.
But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.
Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.
It also raises blood pressure, which is largely problematic for people with existing conditions.
So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.
Rory Reynolds
THREE
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
What is type-1 diabetes
Type 1 diabetes is a genetic and unavoidable condition, rather than the lifestyle-related type 2 diabetes.
It occurs mostly in people under 40 and a result of the pancreas failing to produce enough insulin to regulate blood sugars.
Too much or too little blood sugar can result in an attack where sufferers lose consciousness in serious cases.
Being overweight or obese increases the chances of developing the more common type 2 diabetes.
RACE CARD
5pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (Turf) 2,200m
5.30pm: Khor Al Baghal – Conditions (PA) Dh80,000 (T) 1,600m
6pm: Khor Faridah – Handicap (PA) Dh80,000 (T) 1,600m
6.30pm: Abu Dhabi Fillies Classic – Prestige (PA) Dh110,000 (T) 1,400m
7pm: Abu Dhabi Colts Classic – Prestige (PA) Dh110,000 (T) 1,400m
7.30pm: Khor Laffam – Handicap (TB) Dh80,000 (T) 2,200m
Important questions to consider
1. Where on the plane does my pet travel?
There are different types of travel available for pets:
- Manifest cargo
- Excess luggage in the hold
- Excess luggage in the cabin
Each option is safe. The feasibility of each option is based on the size and breed of your pet, the airline they are traveling on and country they are travelling to.
2. What is the difference between my pet traveling as manifest cargo or as excess luggage?
If traveling as manifest cargo, your pet is traveling in the front hold of the plane and can travel with or without you being on the same plane. The cost of your pets travel is based on volumetric weight, in other words, the size of their travel crate.
If traveling as excess luggage, your pet will be in the rear hold of the plane and must be traveling under the ticket of a human passenger. The cost of your pets travel is based on the actual (combined) weight of your pet in their crate.
3. What happens when my pet arrives in the country they are traveling to?
As soon as the flight arrives, your pet will be taken from the plane straight to the airport terminal.
If your pet is traveling as excess luggage, they will taken to the oversized luggage area in the arrival hall. Once you clear passport control, you will be able to collect them at the same time as your normal luggage. As you exit the airport via the ‘something to declare’ customs channel you will be asked to present your pets travel paperwork to the customs official and / or the vet on duty.
If your pet is traveling as manifest cargo, they will be taken to the Animal Reception Centre. There, their documentation will be reviewed by the staff of the ARC to ensure all is in order. At the same time, relevant customs formalities will be completed by staff based at the arriving airport.
4. How long does the travel paperwork and other travel preparations take?
This depends entirely on the location that your pet is traveling to. Your pet relocation compnay will provide you with an accurate timeline of how long the relevant preparations will take and at what point in the process the various steps must be taken.
In some cases they can get your pet ‘travel ready’ in a few days. In others it can be up to six months or more.
5. What vaccinations does my pet need to travel?
Regardless of where your pet is traveling, they will need certain vaccinations. The exact vaccinations they need are entirely dependent on the location they are traveling to. The one vaccination that is mandatory for every country your pet may travel to is a rabies vaccination.
Other vaccinations may also be necessary. These will be advised to you as relevant. In every situation, it is essential to keep your vaccinations current and to not miss a due date, even by one day. To do so could severely hinder your pets travel plans.
Source: Pawsome Pets UAE
Results
2pm: Serve U – Maiden (TB) Dh60,000 (Dirt) 1,400m; Winner: Violent Justice, Pat Dobbs (jockey), Doug Watson (trainer)
2.30pm: Al Shafar Investment – Conditions (TB) Dh100,000 (D) 1,400m; Winner: Desert Wisdom, Bernardo Pinheiro, Ahmed Al Shemaili
3pm: Commercial Bank of Dubai – Handicap (TB) Dh68,000 (D) 1,200m; Winner: Fawaareq, Sam Hitchcott, Doug Watson
3.30pm: Shadwell – Rated Conditions (TB) Dh100,000 (D) 1,600m; Winner: Down On Da Bayou, Xavier Ziani, Salem bin Ghadayer
4pm: Dubai Real Estate Centre – Maiden (TB) Dh60,000 (D) 1,600m; Winner: Rakeez, Patrick Cosgrave, Bhupat Seemar
4.30pm: Al Redha Insurance Brokers – Handicap (TB) Dh78,000 (D) 1,800m; Winner: Capla Crusader, Bernardo Pinheiro, Rashed Bouresly
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
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