Microsoft Earnings Jump Aided by Cloud-Computing Demand During Pandemic
April 29 2020 - 3:59PM
Dow Jones News
By Aaron Tilley
Microsoft Corp. posted higher third-quarter earnings propelled
by strength in its cloud-computing business with some of its
operations getting an extra boost from the coronavirus pandemic
that has forced many day-to-day activities online.
The software giant on Wednesday reported earnings per share of
$1.40 for the quarter ended March 31, up from $1.14 for the prior
year period. Microsoft said sales rose 15% in the first three
months of the year to $35 billion. Analysts surveyed by FactSet
expected $1.28 of per-share earnings and sales of $33.76 billion
for the quarter.
A big boost came from Microsoft's Azure cloud business, which
the Redmond, Wash.-based company said grew sales 59% in the
quarter. Cloud-computing, already an earnings driver before the
pandemic, has become more central for many Microsoft customers as
they have moved to support employees working remotely and a boom in
online activity with people sheltering at home.
"We've seen two years' worth of digital transformation in two
months," Microsoft Chief Executive Satya Nadella said in a
statement.
Revenue from the company's commercial cloud operations, which
reflects both its Azure cloud business as well as cloud-based
applications, grew 39% to $13.3 billion.
The novel coronavirus outbreak, in February, caused Microsoft to
warn of supply chain disruptions that were expected to cause
first-quarter sales in its personal-computing business, which
includes licensing revenue from PC sales, the Xbox gaming platform
and Surface laptops, to fall short of the previous revenue forecast
of $10.75 billion and $11.15 billion.
The group, Microsoft said Wednesday, generated sales of $11
billion as demand to support remote work and teaching offset some
of the supply chain issues. Microsoft said that supply chain
constraints improved later in the quarter.
All three of Microsoft's main business areas saw sales grow from
the year-ago period.
Shares in the largest publicly traded company rose 1.45% in
aftermarket trading.
Write to Aaron Tilley at aaron.tilley@wsj.com
(END) Dow Jones Newswires
April 29, 2020 16:44 ET (20:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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