{"id":6626,"date":"2022-01-26T00:18:06","date_gmt":"2022-01-26T00:18:06","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/26\/microsoft-delivers-51-7b-in-second-quarter-revenue-as-cloud-gaming-pc-sales-all-grow\/"},"modified":"2022-01-26T00:18:06","modified_gmt":"2022-01-26T00:18:06","slug":"microsoft-delivers-51-7b-in-second-quarter-revenue-as-cloud-gaming-pc-sales-all-grow","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/26\/microsoft-delivers-51-7b-in-second-quarter-revenue-as-cloud-gaming-pc-sales-all-grow\/","title":{"rendered":"Microsoft delivers $51.7B in second quarter revenue as cloud, gaming, PC sales all grow"},"content":{"rendered":"

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Microsoft Corp.\u2019s stock recovered from an early slide and was up almost 3% following a fiscal second quarter financial report<\/a> that saw the company beat expectations on earnings and revenue.<\/p>\n

The company reported a net income for the quarter of $18.8 billion, up 21% from a year ago. Earnings came to $2.48 per share, up 22%, on total revenue of $51.7 billion, rising 20% from a year ago.<\/p>\n

It was a strong performance, with Wall Street predicting Microsoft to report earnings of just $2.31 per share on revenue of $50.9 billion.<\/p>\n

Microsoft Chairman and Chief Executive Satya Nadella (pictured) said the company was benefiting from the fact that tech as a percentage of global gross domestic product continues to rise. \u201cWe are innovating and investing across diverse and growing markets with a common underlying technology stack and an operating model that reinforces a common strategy, culture, and sense of purpose,\u201d he said.<\/p>\n

Microsoft\u2019s stock initially fell in the minutes after its report was first published, with investors perhaps a little upset the company\u2019s cloud business didn\u2019t do better. The company said its Intelligent Cloud segment, which includes the Azure public cloud, GitHub and products such as Windows Server, pulled in revenue of $18.33 billion. That was just above Wall Street\u2019s consensus of $18.3 billion, representing 25.5% growth.<\/p>\n

Microsoft said however its revenue from \u201cAzure and other cloud services\u201d was up 46%. That\u2019s better than the overall segment, but it was worse than the previous four quarters, where growth had been above 50%.<\/p>\n

Microsoft\u2019s hot streak in the cloud has cooled somewhat and investors will take notice of that, Forrester analyst Lee Sustar told SiliconANGLE. He speculated the slowdown could be due to enterprises moderating their cloud service spending following the pandemic-driven upswing, or else due to some enterprises simply hedging their bets with other cloud providers, embracing a true multicloud strategy<\/p>\n

\u201cStill, a 46% growth rate indicates that big consumers of IT infrastructure \u2013 both in the public and private sector \u2013 are taking a \u201ccloud first\u201d approach to IT spending,\u201d Sustar said. \u201cThat will continue to benefit Microsoft.\u201d<\/p>\n

Elsewhere, Microsoft enjoyed steady growth in its More Personal Computing segment. The business, which includes revenue from Windows, device sales, advertising and gaming, saw sales of $17.47 billion, up 15.5% and above the consensus estimate of $16.56 billion.<\/p>\n

Microsoft said Windows license sales rose 25% in the fourth quarter, a seemingly decent performance at a time when Gartner Inc. reported that personal computer shipments were down 5%.<\/p>\n

Microsoft\u2019s Xbox hardware revenue was up 4%. Its gaming business now represents more than 11% of the company\u2019s total revenue, perhaps underscoring why Microsoft was so keen to spend $68.7 billion<\/a> to acquire the games maker Activision Blizzard Inc. during the quarter \u2013 it\u2019s largest ever deal.<\/p>\n

On a call with analysts, Nadella said that buying Activision would help consumers to play games wherever and however they want. The deal will effectively \u201cshape the future of gaming\u201d Nadella said, without elaborating.<\/p>\n

Holger Mueller of Constellation Research Inc. said the acquisition of Activision suggests that Microsoft has a strategy for its next level of growth in the making. \u201cThe company is in good shape with all key performance indicators up over 20%,\u201d he said. \u201cThat\u2019s not something investors from a few years ago would have expected to see from Microsoft in the 2020s.\u201d<\/p>\n

The other key segment of Microsoft is its Productivity and Business Processes unit, which includes Office, Dynamics and LinkedIn. The segment reported revenue of $15.94 billion, up 19% from a year ago and just ahead of analyst\u2019s forecasts.<\/p>\n

Pund-IT Inc. analyst Charles King said Microsoft\u2019s stock wobble was likely the result of a much broader swooning that\u2019s being seen in the U.S. and global financial markets amid inflationary trends and ongoing supply chain woes.<\/p>\n

\u201cIn other circumstances, the quarter-to-quarter drop in Microsoft\u2019s revenues and Azure cloud services growth might have been shrugged off,\u201d King said. \u201cDespite these problems and challenges, Microsoft\u2019s leadership across numerous business and consumer markets and its overall financial strength provides a much firmer foundation than many of its peers. That should help Microsoft maintain its footing until markets are back in balance.\u201d<\/p>\n

Microsoft had a busy quarter. Besides buying Activision, it also found time to launch Windows 11<\/a> \u2013 the successor to Windows 10 \u2013 and agreed a deal to acquire AT&T Inc.\u2019s advertising tech business<\/a> Xandr Inc.<\/p>\n

For guidance, Microsoft said it\u2019s expecting third quarter revenue of $48.5 billion at the low end, and $49.3 billion at the upper end of its estimate. That compares well with Wall Street\u2019s forecast of just $48.23 billion in Q3 revenue.<\/p>\n

Photo: Fortune Brainstorm TECH\/Flickr<\/a><\/h5>\n
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