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Microsoft
the shares are trading higher after the software giant reported better-than-expected quarterly results. The company showed strength overall, gaining momentum in particular thanks to the acceleration of cloud computing adoption.
During the second fiscal quarter ended Dec. 31, Microsoft (MSFT) reported revenue of $ 43.1 billion, up 17% from a year ago, with earnings of $ 2.03 per share, up 34% . This easily exceeded Wall Street’s consensus forecasts of $ 40.2 billion in revenue and $ 1.64 per share earnings.
“What we have witnessed over the last year is the dawn of a second wave of digital transformation that is dragging all businesses and all industries,” Satya Nadella CEO said in a statement. “Building your own digital capability is the new currency that drives the resilience and growth of all organizations.”
Chief Financial Officer Amy Hood added that “accelerating demand for our differentiated offerings brought commercial cloud revenue to $ 16.7 billion, up 34% from the previous year.”
Microsoft’s quarterly gaming revenue topped $ 5 billion for the first time, driven by 86% growth in Xbox hardware revenue, reflecting the launch of a new generation of gaming consoles.
The company saw business accelerate from the September quarter in all three product segments, where revenue also exceeded forecasts.
Sales in the productivity and business processes segment (which includes Office and LinkedIn) totaled $ 13.4 billion, up 13%, and exceeded the targeting range of $ 12.75 billion to $ 13 billion.
For Intelligent Cloud, which includes the Azure cloud platform, sales amounted to $ 14.6 billion, up 21%, well above the projected range of $ 13.55 to $ 13.8 billion. Azure’s revenue rose 50%, compared to 48% growth in the September quarter.
Sales in the more personal IT segment, which includes Windows and Surface computers and tablets, totaled $ 15.1 billion, up 14%, well above the company’s estimate of $ 13.2 billion to $ 13.6 billion. This includes a 40% increase in Xbox content and services.
Surface revenue slowed in the quarter to 3% growth, from 37% in the September quarter; the company said the slowdown largely reflects the product launch schedule from a year ago and that it would make sense for investors to look at surface earnings over the combined two quarters.
Microsoft said it returned $ 10 billion to shareholders during the quarter, including $ 6.5 billion in share repurchases. The company ended the quarter with $ 132 billion in cash, cash equivalents and short-term investments, offset by $ 55 billion in long-term debt.
In a conference call with investors, Chief Financial Officer Hood said the company expects March quarter revenue in the productivity and business processes segment to range from $ 13.35 billion to $ 13.6 billion. Revenue to the smart cloud is expected to range from $ 14.7 billion to $ 14.952 billion. More revenue in personal computing is expected to be between $ 12.3 billion and $ 12.7 billion. At the top of the range for each segment, quarterly revenue would be $ 41.225 billion, well ahead of the street consensus of $ 38.7 billion. Hood also said the company expects double-digit gains in revenue and operating profits throughout the fiscal year ending June 2021.
During the quarter ended Sept. 30, Microsoft posted a revenue gain of 12%, to $ 37.2 billion, with earnings of $ 1.82 per share.
In today’s regular session, Microsoft closed 1.2%, at $ 232.33, giving the company a market value of $ 1.77 billion, higher than any other company that
apple
(AAPL). Shares have risen 41% in the last twelve months.
At the end of trading on Tuesday, Microsoft rose another 4.8% to $ 243.50.
Write to Eric J Savitz to [email protected]