Microsoft Stock jumps on strong quarterly results

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Microsoft

stocks are trading higher after the software giant released better-than-expected quarterly results. The company has demonstrated strength at all levels, notably benefiting from the accelerated adoption of cloud computing.

For its fiscal second quarter ended December 31, Microsoft (ticker: MSFT) reported revenue of $ 43.1 billion, up 17% from last year, with profits of 2, 03 dollars per share, up 34%. This easily beat the Wall Street consensus forecast for $ 40.2 billion in revenue and $ 1.64 per share earnings.

“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping across all businesses and industries,” CEO Satya Nadella said in a statement. “Building their own digital capacity is the new currency that drives the resilience and growth of every organization.”

CFO Amy Hood added that “accelerating demand for our differentiated offerings has brought commercial cloud revenue to $ 16.7 billion, up 34% year-over-year.”

Microsoft’s quarterly gaming revenue topped $ 5 billion for the first time, driven by an 86% growth in hardware revenue for the Xbox, reflecting the launch of a new generation of gaming consoles.

The company saw its activity pick up from the September quarter in all three product segments, where revenues also exceeded expectations.

Sales in the productivity and business process segment (which includes Office and LinkedIn), were $ 13.4 billion, up 13%, and above the $ 12.75 billion range to $ 13 billion.

For Intelligent Cloud, which includes the Azure cloud platform, sales were $ 14.6 billion, up 21%, well above the projected range of $ 13.55 billion to $ 13. 8 billion dollars. Azure revenue grew 50%, up from 48% growth in the September quarter.

Sales in the more personal computing segment, which includes Windows and Surface tablets and PCs, reached $ 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 revenues slowed during the quarter to reach a growth of 3%, compared to 37% in the September quarter; the company said the slowdown largely mirrors the product launch schedule a year ago and that it would make sense for investors to look at Surface revenue in the two quarters combined.

Microsoft said it returned $ 10 billion to holders in the quarter, including $ 6.5 billion in share buybacks. 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, CFO Hood said the company expects March quarter revenue in the productivity and business process segment to range from $ 13.35 billion to $ 13. , 6 billion dollars. Smart cloud revenue is expected to range from $ 14.7 billion to $ 14.95 billion. Additional personal computing revenue is expected to range from $ 12.3 billion to $ 12.7 billion. At the top of the range for each segment, revenue for the quarter would be $ 41.25 billion, well ahead of consensus Street at $ 38.7 billion. Hood also said the company expects double-digit earnings and operating profit gains for the full year ending June 2021.

For its quarter ended Sept. 30, Microsoft posted a 12% revenue gain to $ 37.2 billion, with profits of $ 1.82 per share.

In today’s regular session, Microsoft closed up 1.2%, at $ 232.33, giving the company a market value of $ 1.77 billion, higher than any other company. than

Apple

(AAPL). The stock has risen 41% in the past 12 months.

As of Tuesday’s trading day, Microsoft was up 4.8% to $ 243.50.

Write to Eric J Savitz at [email protected]