MicrosoftMicrosoft Corp met analysts expectations on Tuesday for its quarterly sales and beat profit estimates, but shares fell slightly as investors sought for signs of a stronger economic recovery and stellar performance as its market value surged.
The Redmond, Washington company has been one of the world's most important companies, worth more than $2 trillion, by jumping into the huge market for cloud computing.Microsoft made the transition as smartphones became more popular, eroding demand for its flagship Windows operating system for PCs.
Microsoft's Azure cloud service is closing ground on market-share leader AmazonAmazon Web Services, and it is doubling down on productivity software used by businesses worldwide to get tools similar to Microsoft One.
Reports from Refinitiv showed that the revenue and adjusted earnings per share were $41.7 billion and $1.95 per share for the third quarter ended 31 March, over analyst estimates of $41.03 billion and $1.78 per share, according to the data from Refinitiv.
The stock has increased 40% over the past year as students turned to Slack Technologies Inc.’s Teams collaboration software, which competes with Teams Software for working at home.Companies have been speeding up plans to transition software from the company's cloud computing services.
Microsoft has continued to double down on cloud-based software and announced earlier in the month that it would buy the artificial intelligence software firm Nuance Communications Inc for $16 billion, excluding net debt, to bolster its healthcare business.
The booming sales in home computers for working from home have also helped to boost the company's Windows operating system business.
Amazon said its closely monitored cloud computing operation, which rivals Microsoft with AmazonAmazon Web ServicesAmazon Web Services and Google Cloud, grew 50% or 46% in the quarter, when adjusted for currency fluctuations.This is lower than the quarter before, but according to Visible Alpha analyst data drops to 46.3% growth.
According to Refinitiv data, the overall sales of Microsoft's intelligent cloud unit that contains Azure were $15.1 billion, above analysts' estimates of $14.92 billion.
Revenues for Microsoft's Productivity Software unit, which includes the Office and Teams software, were $13.6 billion compared with estimates by Refinitiv of $13.49 billion.The sales for the LinkedIn social network were revised on a currency adjusted basis (2.35%), slightly above Visible Alpha estimates of 21.9%, as demand continued to recover from a sharp decline in job listings and hiring at the onset of the pandemic.
According to RefinitivRefinitiv Data, Microsoft's personal computing unit, which includes its Windows Operating System and Xbox Gaming Console, had $12.57 billion in sales compared to analysts' expectations of $13.0 billion.PC makers' revenue was up 10% in the quarter compared to a 1% rise the year before.