Microsoft turned in another quarter of stronger than expected growth on Wednesday, as the pandemic brought a jump in activity in its gaming business and solid demand for PCs.

The surges in playing and working from home were the biggest factors in a 13 per cent jump in revenue in the latest period, to $38bn, with pro forma earnings per share rising 7 per cent to $1.46. Wall Street had been expecting revenue growth of only 9 per cent and unchanged earnings.

Net income fell 15 per cent from the previous year, when the figures were flattered by a large one-off item.

Microsoft shares fell back more than 2 per cent in after-market trading despite the outperformance, after a 32 per cent jump since the start of the year that has pushed the company’s value to more than $1.6tn.

More Personal Computing — the name given to the company’s PC and gaming division — saw revenue jump 14 per cent to $12.9bn, almost $1.5bn more than expected, as demand for gaming and home computing took off.

The coronavirus crisis also fed demand for the Azure cloud platform, where sales were up 47 per cent, and Teams, the messaging and collaboration service that has seen usage surge this year.

By contrast, sales of traditional server software were unchanged from a year ago, as the crisis led companies to delay installing new technology in their own offices.

Meanwhile, the value of business bookings — a key indicator of future revenue — grew by 12 per cent. That was in line with the previous quarter, when a deceleration in bookings prompted some concern among investors that demand was weakening during the pandemic.


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