Google beats on ad revenue expectations, Microsoft slows hiring
Yahoo Finance tech reporter Dan Howley joins the Live show to break down Microsoft and Google's earnings reports, advertising revenue, and tech companies' hiring practices.
Video Transcript
DAVE BRIGGS: All right, let's get a recap on both Microsoft and Alphabet earnings just in the last couple of minutes. Dan Howley back with us at the desk. Dan, what are you seeing?
DAN HOWLEY: Yeah, I mean, I think the big takeaway here is that from analysts that I'm seeing so far, despite the miss on the top and bottom line-- they had 51.9 billion in revenue versus that 52.4 billion that was expected in $2.23 earnings per share versus $2.29-- the cloud story is still a positive. And I think that's what Wall Street is looking at. And that's probably why we're not seeing Microsoft smacked around as much as you would expect for a company that just missed on top and bottom line.
They're down less than 1% right now, despite that. And I think a lot of that speaks to the myriad issues that they are facing. Like, they said that their Azure business was up more than 40% year over year. That's what people look at, is the Azure business. That despite the fact that their Intelligent Cloud business itself missed expectations. That was at 20.9 billion versus 21.1 billion expected.
There's just a litany of problems that Microsoft pointed out that are external factors that impacted it. They said it was basically the slowing-- sorry, slowing economy, issues with Russia, the lockdowns in China, which also resulted in slowing PC sales.
DAVE BRIGGS: They said slowing PC sales we've seen for quite a bit as well, yeah.
DAN HOWLEY: Right, I think the lockdowns really hit them there. And so they kind of just lay out what exactly is hurting them and basically pointing to the fact that it's not their fault, more or less. They also had recorded employee severance expenses of 113 million. That excludes Russia, so that's talking to some of the layoffs that we had seen at Microsoft. And obviously, they're slowing hiring as well. So I mean, you look at this in the big picture. The cloud business continues to do well. That's the main driver for Microsoft. And I think that's why, again, the company is off less than 1% after these earnings.
RACHELLE AKUFFO: And so, Dan, seeing these results, then, what do you think this is going to do for hiring going forward, when a lot of these companies are already tightening their belts, and then on top of that, are now worrying about their macroeconomic conditions not really seeming to be improving.
DAN HOWLEY: Yeah, it's hard to say, right, because when we look at the big tech companies, right, these megacap tech companies, we haven't heard much about layoffs. We've heard about slowing hiring. And even Microsoft, they basically said it's not a huge amount that we're doing here. They definitely slowed down hiring. Google slowing hiring, Meta, Facebook-- again, if we're still going to go back and forth, see what you want to call it. But they're slowing hiring, Apple's slowing hiring.
But I don't know if that means, necessarily, that we'll see major layoffs or things along those lines. I think the big deal here is, they're still going to be hiring, just not at the huge rates that they were hiring previously. The most important thing is that they don't see any kind of major brain drain from the companies themselves, as people, if they were laid off, they went to competitors. So I think that's probably going to be top of mind. And they'll continue to hire, by the way, for their most important businesses. That's something that's certainly worth pointing out.
