Microsoft Corp on Tuesday said that profit rose sharply last quarter as the COVID-19 pandemic reinforced the shift to relying on services hosted in the cloud for work, play and socializing.
The US technology stalwart reported net income of US$15.5 billion in the final three months of last year, a 33 percent jump from the same period a year earlier.
Revenue rose 17 percent from a year earlier to US$43.1 billion.
“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,” Microsoft CEO Satya Nadella said in an earnings call.
Microsoft’s commercial cloud offerings took in revenue of US$16.7 billion, up 34 percent from a year earlier, Microsoft chief financial officer Amy Hood said.
“We continue to benefit from our investments in strategic, high-growth areas,” she said.
Microsoft shares were up more than 5 percent in after-market trade.
“These were blow-out numbers that will be another feather in the cap for the tech sector as the cloud growth party is just getting started, in our opinion, led by Microsoft,” Wedbush Securities Inc analyst Dan Ives said in a note to investors.
Revenue in its consumer-focused More Personal Computing unit rose 14 percent to US$15.1 billion, helped by a 40 percent surge in money taken by its Xbox video game unit, the company said.
Sony Corp’s PlayStation 5 and Microsoft’s newest Xbox were released in November last year, vying for holiday-season dominance as the pandemic boosted gaming demand.
It was the first time in the year-end holiday quarter that gaming revenue at Microsoft topped US$5 billion, and the launch of the latest Xbox models was the most successful in the history of the consoles, Nadella said.
Nadella expected the shift to cloud services and remote work to linger even after the pandemic is a thing of the past.
“We obviously are not going to have the same constraints going forward; I am not at all assuming we will remain as is,” he said.
“At the same time, there is no return to January of 2020. What I think is key for us is to maintain flexibility,” he said.
He envisioned “hybrid” work styles that combine remote work with visits to offices or other job sites.
“In hybrid work you need that sophisticated set of tools that really tracks workflow irrespective of who is where,” Nadella said. “That is what we are focused on; that is how we expect work to evolve.”
Cash-strapped developer China Evergrande Group (恆大集團) has begun repaying investors in its wealth management products with real estate, said Hengda Real Estate Group Co Ltd (恆大地產), its main unit. Evergrande, with more than US$300 billion in liabilities, is in the throes of a liquidity crisis that has left it racing to raise funds to pay its many lenders and suppliers. It has a bond interest payment of US$83.5 million due on Thursday. The company said on WeChat on Saturday that investors interested in redeeming wealth management products for physical assets should contact their investment consultants or visit local offices. Financial news outlet Caixin on
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