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Microsoft Results Beat Estimates For 10th Straight Quarter

Microsoft has posted results that exceed the Wall Street estimates for the tenth straight quarter.

Sales in the June quarter climbed 21 per cent to hit $46.2 billion, shooting past the $44.3 billion estimate. Net income rose to $2.17 a share, well above the predicted $1.92.

Azure sales increased by 51 per cent, but investors note that without currency fluctuations brought on by the pandemic, the ‘real’ growth sits at around 45 per cent.

Azure’s performance was, however, better than Microsoft’s own forecasts.

“Forty-five percent was both better than we expected and driven by consumption growth, which is very good,” Chief Financial Officer Amy Hood. “Demand is healthy, the overall execution was better than I expected.”

Like Apple, Microsoft’s impressive results weren’t enough to stop shares slipping 0.87 per cent in late trading, as concerns about the Azure cloud computing business suggest that growth is slowing. After Microsoft’s initial report, stocks dropped 2.6 per cent, before correcting.

Commercial cloud sales across the board rose 36 per cent to $19.5 billion, with the company’s gross margin growing 4 points to 70 per cent.

Microsoft’s ‘Productivity Unit’, which comprises mainly of Office software, saw $14.7 billion in sales, compared to Wall Street analyst forecasts of $14 billion.

Teams jumped to 250 million monthly active users, a massive increase from April’s 145 million.

Intelligent Cloud products, which include Azure and other server software, rose to $17.4 billion, a $16.4 billion estimate.

Elsewhere, gaming revenue jumped 11 per cent, with Xbox sales doubling, while sales of Windows software to PC manufacturers dropped 3 per cent, a market correction following the previous June quarter’s boom in laptop sales.

Considering the company has Windows 11 up its sleeves, and the increase in Teams users, Microsoft’s purple patch looks to continue for some time.

 

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