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Microsoft posted record profits and sales on Tuesday despite investors’ fears that the pandemic-induced tech boom could end.
Microsoft, the first of the largest technology companies to report quarterly earnings ending in December, said its sales were $51.7 billion, up 20 percent from the previous year, and its profits were up 21 percent to $18.8 billion. The company has seen particularly strong growth in cloud services as it locks out long-term client deals.
Shares of the company fell nearly 5 percent in aftermarket trading, despite beating Wall Street expectations. The drop was likely due to a tense stock market and some results that fell short for bullish investors.
Microsoft had $125 billion in cash, and almost $70 billion of that it hopes to spend in a deal to acquire video game giant Activision. announced this month. Bank of America analysts described the acquisition as a “knowledgeable maneuver” and “a strategic and financial positive that could accelerate Microsoft’s gaming business across multiple platforms.”
Sales of Microsoft’s cloud offerings to commercial customers, which include Office 365 subscriptions and cloud computing platform Azure, increased 32 percent to $22.1 billion. Revenue set to increase further Price increases for Office 365It will go into effect in March, which includes the Word and Teams communication app. According to Wedbush Securities, price increases could generate $5 billion in extra revenue this year.
Azure is the second largest cloud platform after Amazon Web Services. It’s part of a fundamental shift in the way companies move their business more online. Azure grew 46 percent, reflecting how customers in different industries are signing larger and longer deals.
Brett Iversen, Microsoft’s head of investor relations, said that despite the stock market turmoil, the company is focusing on long-term opportunities, so “it can cut short-term, outside noise that we don’t have a lot of control over.” ”
Mr. Iversen said Microsoft’s Windows business was particularly strong, with sales increasing 25 percent as enterprise customers purchased new computers for their employees.
Despite the chip shortage limiting the supply of the new Xbox console during the holiday season, the company’s gaming business as part of the PC segment grew 8 percent and rose 15 percent to $17.5 billion.
So called big resignation It also supported LinkedIn, the professional social network that increased revenue among employees by 37 percent.
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