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Microsoft rise to records after quarterly earnings beat estimates



Revenue at Microsoft increased 22% in its fiscal first quarter from a year earlier to $45.3 billion, while earnings of $2.27 exceeded the average estimate of $2.07, according to Refinitiv.

For the current quarter, Amy Hood, Microsoft’s finance chief, said that even without the impact of an accounting change resulting in a longer useful life of data center equipment, she expects gross margin to go up by 2 percentage points as the company makes improvements in its cloud businesses.

Microsoft’s PC-related business, meanwhile, is powering through the global supply chain bottleneck. The company reported 10% revenue growth in Windows license sales to device makers,

“Microsoft overcame the two key concerns heading into the print – the PC exposure and margins,” UBS analysts, who have a buy rating on the stock, wrote in a note after the earnings report.


Business Highlights

Revenue in Productivity and Business Processes was $13.6 billion and increased 15% (up 12% in constant currency), with the following business highlights:

· Office Commercial products and cloud services revenue increased 14% (up 10% in constant currency) driven by Office 365 Commercial revenue growth of 22% (up 19% in constant currency)

· Office Consumer products and cloud services revenue increased 5% (up 2% in constant currency) and Microsoft 365 Consumer subscribers increased to 50.2 million

· LinkedIn revenue increased 25% (up 23% in constant currency)

· Dynamics products and cloud services revenue increased 26% (up 22% in constant currency) driven by Dynamics 365 revenue growth of 45% (up 40% in constant currency)

Revenue in Intelligent Cloud was $15.1 billion and increased 23% (up 20% in constant currency), with the following business highlights:

· Server products and cloud services revenue increased 26% (up 23% in constant currency) driven by Azure revenue growth of 50% (up 46% in constant currency)

Revenue in More Personal Computing was $13.0 billion and increased 19% (up 16% in constant currency), with the following business highlights:

· Windows OEM revenue increased 10%

· Windows Commercial products and cloud services revenue increased 10% (up 7% in constant currency)

· Xbox content and services revenue increased 34% (up 32% in constant currency)

· Search advertising revenue excluding traffic acquisition costs increased 17% (up 14% in constant currency)

· Surface revenue increased 12% (up 7% in constant currency)

Microsoft returned $10.0 billion to shareholders in the form of share repurchases and dividends in the third quarter of fiscal year 2021, an increase of 1% compared to the third quarter of fiscal year 2020.



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