Microsoft met analysts’ quarterly sales expectations on Tuesday and exceeded profit expectations, but its share price fell slightly, reflecting doubts about the one-time gains contained in the results and the high rise after a year-long rebound. expect.
By grabbing market share in the booming cloud computing market and expanding its team collaboration services and LinkedIn social networking services, this company in Redmond, Washington has become one of the world’s most valuable companies, with a market value close to 2 Trillions of dollars (about 1 billion rupees). In the past year, inventories have increased by 50%, followed by a further increase of 148,875 billion (148,875 billion).
During the pandemic, these services are still in high demand, and Microsoft’s Azure cloud service was shut down due to market share leader Amazon Web Services, and it grew by 50% in the quarter. People working and studying at home bought new PCs and video consoles, stimulating the Microsoft Windows operating system and video game business.
Net income for the third quarter ended March 31 increased by 44% from the same period last year, reaching US$15.5 billion (approximately Rs 1,15,380 crore). Revenue and adjusted earnings per share were US$41.7 billion (approximately Rs 3,10,380 crore) and US$1.95 (approximately Rs 150), which were higher than analysts’ expectations of US$41.03 billion (approximately Rs 3,540 crore) and 1.78 US dollars (approximately rupee). Refinitiv’s data is 130 per share.
After executives gave better-than-expected forecasts in a conference call with investors, the stock price fell 2.5%, making up for the larger decline.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said: “One-time tax and exchange rate advantages boosted Microsoft’s third-quarter figures, so the market did not welcome numbers that exceeded expectations as you expected.” Net profit includes court rulings in India. The favorable tax benefit of 620 million U.S. dollars (approximately 461 billion rupees).
“This is the danger of trading at the valuation that Microsoft enjoys, which is 32.8 times the earnings of next year. It is even disappointing and the market will not be able to forgive it.”
Sales of what Microsoft calls “commercial cloud” increased by 33% to $17.7 billion (approximately 131.17 billion rupees), which includes server infrastructure such as Azure and cloud-based Office software. Sales of the Dynamics 365 customer management business, which competes directly with Salesforce, increased by 45%, while the number of Office 365 commercial users increased by 15%.
When talking about the performance of Office 365 for business customers, Microsoft CFO Amy Hood said: “This is the fourth consecutive quarter to achieve 15% seat growth on a very large basis.”
Microsoft has been continuing to double its investment in cloud-based software and stated earlier this month that it would acquire Nuance Communications, an artificial intelligence software company, for US$16 billion (approximately Rs 11,910 crore) to increase its healthcare business.
Microsoft said that its much-watched cloud computing business, Azure, competes with Amazon’s Amazon Web Services and Alphabet’s Google Cloud, with a 50% increase this quarter and an increase of 46% after adjusting for exchange rate changes. According to data from Visible Alpha, this is a decrease from the previous quarter’s currency-adjusted 48%, but it is in line with analysts’ expectations of a 46.3% increase.
According to data from Refinitiv, the overall sales of Microsoft’s “smart cloud” division including Azure was US$15.1 billion (approximately 11.24 billion rupees), higher than analysts’ expectations of US$14.92 (approximately 110.16 billion rupees).
Microsoft said that the Microsoft team has 145 million daily users, up from 115 million in October. Refinitiv data shows that Microsoft’s productivity software division, including Office and Teams, has sales of $13.6 billion (approximately Rs 1,235 crore), while the estimated value is $13.49 billion (approximately Rs 1,400,400 crore).
After currency adjustments, LinkedIn social network sales increased by 23%, slightly higher than the 21.9% expected by Visible Alpha, as revenue continued to recover from the sharp decline in the job list and hiring at the beginning of the pandemic.
According to data from Refinitiv, Microsoft’s personal computing division, which includes Windows operating systems and Xbox game consoles, had sales of 13 billion U.S. dollars (approximately Rs 96,750 crore), while analysts’ expectations were 1.257 billion U.S. dollars (approximately 9,351 billion rupees). rupee). Windows sales to PC manufacturers increased by 10%, compared with a 1% increase in the previous quarter.
In a conference call with investors, Microsoft predicted that the midpoint of the fourth-quarter revenue of the productivity department was 13.93 billion U.S. dollars (approximately 10.363 billion rupees), higher than Refinitiv’s estimate of 13.57 billion U.S. dollars (approximately 10,905 million rupees). The midpoints of its sales of smart cloud and personal computing business are expected to be 16.32 billion U.S. dollars (approximately 1,21,405 crore) and 13.80 billion U.S. dollars (approximately 1,02,660 crore), higher than the expected 16 billion U.S. dollars (About 1 rupees). According to data from Refinitiv, the figure is 1,190.30 crore) and 13.26 billion US dollars (approximately 98,640 crore).
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