Microsoft misses on top and bottom lines

Microsoft shares fell 2% in extended trading after the software maker reported fiscal fourth-quarter results that failed to reach Wall Street consensus.

Here's how the company did:

Microsoft's revenue increased by 12% year over year in the quarter, which ended on June 30, compared with 18% growth in the previous quarter. according to a statement. Net income moved up 2% to $16.74 billion.

Microsoft's Intelligent Cloud segment, which includes the Azure public cloud for application hosting, SQL Server, Windows Server and enterprise services generated $20.91 billion in revenue. That was up 20% and below the consensus of $21.10 billion among analysts polled by StreetAccount.

The company said revenue from Azure and other cloud services grew by 40%, compared with 46% in the prior quarter. Analysts surveyed by CNBC had expected 43.1%, while the consensus estimate from StreetAccount was 43.4%. Microsoft does not disclose Azure revenue in dollars.

Microsoft's Productivity and Business Processes segment including Office productivity software, Dynamics and LinkedIn posted $16.60 billion in revenue. That was up nearly 13% and slightly less than the StreetAccount consensus of $16.66 billion.

During the quarter, Microsoft reduced its quarterly guidance for income and revenue because of changing foreign-exchange rates. CEO Satya Nadella said employees will get pay increases, and the company introduced services to help customers deal with security incidents.

Microsoft shares have sold off 25% so far this year, compared with a decline of 17% for the S&P 500 U.S. stock index.

Executives will discuss the results with analysts and issue guidance on a webcast starting at 5:30 p.m. ET.

This story is developing. Please check back for updates.

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