"Adjusting the net income for inflation, Microsoft had negative real earnings growth of 7.2%"
I assume you base this off Microsoft's Net Income growth of 1.7%. But that includes one-off changes in "Other Income" (markt-to-market losseson equity investments) and the tax rate (up 3 ppt, including prior-year tax benefits from US-China tax treaty changes and a non-US tax audit).
As you mentioned, EBIT grew 7.5%, and even that was after a 5 ppt hit from currency. Constant-currency EBIT grew 14% year-on-year in Q2.
You overlooked the same factors in your similar comment about Alphabet's Net Income.
Thanks Ross for the timely post. I was a bit upset by the market rally this week. It’s just the market going crazy again
"Adjusting the net income for inflation, Microsoft had negative real earnings growth of 7.2%"
I assume you base this off Microsoft's Net Income growth of 1.7%. But that includes one-off changes in "Other Income" (markt-to-market losseson equity investments) and the tax rate (up 3 ppt, including prior-year tax benefits from US-China tax treaty changes and a non-US tax audit).
As you mentioned, EBIT grew 7.5%, and even that was after a 5 ppt hit from currency. Constant-currency EBIT grew 14% year-on-year in Q2.
You overlooked the same factors in your similar comment about Alphabet's Net Income.