Microsoft sales boosted by both work and home entertainment


The gaming boom resulting from this year’s Covid-19 lockdown – supported by an increase in work and home learning – pushed Microsoft’s revenue well above expectations in the last quarter, according to figures released Wednesday evening.

The strong performance, with revenue exceeding $ 1 billion compared to Wall Street forecasts, came despite tensions in other areas of Microsoft’s business. A reduction in technology spending by small and medium-sized businesses, weak job postings on LinkedIn and a sharp decline in Bing search engine ads weighed on performance.

Shares of the US software publisher fell about 2% in aftermarket, as Wall Street also digested a slowdown in the growth of the Azure cloud platform, which has been at the heart of the strategy. Microsoft in recent years. Azure revenue growth fell to 47%, down from 59% in the previous three months.

While this is in line with most analysts’ expectations, it has weighed on Microsoft shares, whose year-to-date 32% rise has taken the company’s value to more than $ 1.6 billion. of dollars.

Satya Nadella, chief executive, said this year’s crisis had given new impetus to a powerful shift to cloud computing, with many companies looking for the first time to switch to digital technology in order to make their businesses more resilient. In the past, they had mainly adopted the technology to support new business ventures, he added.

However, Nadella added that the global economic downturn was also weighing on the company, countering the effect of the digitalization race. “The world has to do well for us to be successful in the long run,” he said. “The world will come out of this and we will be stronger if we invest in this phase.”

Amy Hood, chief financial officer of Microsoft, said the heavy spending on capacity building to cope with the surge in online activity this year, as well as the free offers to customers who are turning to online business for the first time. cloud services, contributed to a two percentage point drop in the company’s gross profit margin in the three months to the end of June.

Overall, Microsoft’s revenue rose 13% to $ 38 billion, with pro forma earnings per share increasing 7% to $ 1.46. Wall Street had forecast revenue growth of just 9% and earnings unchanged. Net income, based on formal accounting rules, fell 15 percent from a year earlier, when the numbers were flattered by a significant one-time item.

Over Personal Computing – the name given to the company’s PC and games division – represented the biggest revenue surprise. Revenue jumped 14% to $ 12.9 billion – nearly $ 1.5 billion more than expected – as demand for games took off. The company also said the demand for PCs has been increased by the mass shift to working from home.

At the same time, the value of corporate bookings – an important indicator of future revenue – increased by 12%. This was in line with that of the previous quarter, when a deceleration in bookings prompted investors to fear demand would weaken during the pandemic.


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