Shares of Microsoft (MSFT 0.88%) climbed 6% on Wednesday after the tech titan's growth forecast helped to calm investors' fears.
Microsoft's revenue rose 12% year over year to $51.9 billion in its fiscal 2022 fourth quarter, which ended on June 30. The gains were driven by strong growth in the software giant's Azure cloud infrastructure platform. Sales in this key segment surged 40%. "In a dynamic environment we saw strong demand, took share, and increased customer commitment to our cloud platform," CFO Amy Hood said in a press release.
Yet Microsoft's results were negatively impacted by a sharp decline in global personal computer (PC) sales. Although revenue for its Office 365 commercial and consumer revenue both increased by 9%, Microsoft's Windows OEM revenue declined by 2%.
Coronavirus-related shutdowns in China, a downturn in the advertising market, and unfavorable foreign exchange fluctuations further dented Microsoft's profits. Still, Microsoft was able to grow its operating income by 8% to $20.5 billion, despite these challenges.
Coming into the quarter, investors feared that Microsoft's growth would slow significantly due to the potential for inflation -- and the Federal Reserve's moves to tame it -- to drive the economy into a deep and prolonged recession. But Hood helped to assuage those fears during the company's conference call. She said Microsoft expects to produce "double-digit revenue and operating income growth" in fiscal 2023. That projected pace of expansion was higher than many investors anticipated.
"As we begin a new fiscal year, we remain committed to balancing operational discipline with continued investments in key strategic areas to drive future growth," Hood said.