Microsoft earnings beat Wall Street expectations as pandemic fuels sales

The results signal that the pandemic is continuing to buoy the tech giant’s business — from computers and gaming systems to the cloud computing systems helping companies navigate continued remote working.
Microsoft (MSFT) posted $43.1 billion in revenue for its fiscal second quarter — a 17% increase from the same period in the prior year and well above the $40.2 billion analysts had predicted. Income hit $15.5 billion, or $2.03 per share, compared with the $1.64 earnings per share Wall Street predicted.

The company’s stock shot up more than 6% in after-hours trading Tuesday.

“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,” Microsoft CEO Satya Nadella said in a statement. “Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform.”

During the quarter, Microsoft had major success with its new Xbox Series X and Series S consoles — so much so that retailers had a hard time keeping them stocked and Microsoft asked chipmaker AMD (AMD) for help in making more available.

Revenue from Microsoft’s “more personal computing” segment, which includes Xbox, increased 14% year-over-year to $15.1 billion. That number includes 40% growth in Xbox content and services revenue — a major turnaround compared to the same period a year earlier, during which Xbox content and services revenue had decreased 11%.

This is a developing story.

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