Business

Microsoft’s profits soar as the speeds of the pandemic shifts to the cloud

SAN FRANCISCO: Microsoft said Tuesday its earnings rose sharply in the recent quarter as the coronavirus pandemic accelerated the shift to reliance on cloud-hosted services for work, play and social networking.

The powerful US tech company reported net income of $ 15.5 billion in the final three months of last year, a 33% increase over the same period in the pre-pandemic 2019.

In its fiscal second quarter update, Microsoft said total revenue rose 17% from a year ago to $ 43.1 billion.

“What we have seen over the past year is the dawn of a second wave of digital transformation sweeping through every company and every industry,” Microsoft CEO Satya Nadella said in a statement on earnings.

“Building their own digital capabilities is the new currency that drives each organization’s resilience and growth.”

Microsoft’s commercial cloud offerings generated $ 16.7 billion in revenue in the first quarter, up 34% over the same period a year earlier, according to CFO Amy Hood.

“We continue to benefit from our investments in high-growth strategic areas,” Hood said.

Microsoft shares rose more than 5% in the after-sales trade that followed the earnings figures announcement.

“These were explosive numbers that will be another feather in the tech sector roof as the cloud growth party is just beginning, in our view led by Microsoft,” Wedbush analyst Dan Ives said in a note to investors.

Revenue in Microsoft’s consumer-focused personal computing unit rose 14% to $ 15.1 billion, supported by a 40% increase in money taken from content and services in the video game console on Xbox, according to the company.

Sales of video games, consoles, and accessories hit a record high in the United States last year as people were gathering indoors due to the pandemic.

Sony’s PlayStation 5 and Microsoft’s latest Xbox were launched in November, as they compete for dominance in the holiday season as the pandemic boosts demand for games.

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