Microsoft profits soar 33% amid virus

MICROSOFT said on Tuesday profit rose sharply in the recently ended quarter as the coronavirus pandemic reinforced the shift to relying on services hosted in the cloud for work, play and socializing.

The United States 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 in pre-pandemic 2019.

Overall revenue rose 17 percent from a year ago to US$43.1 billion, Microsoft said in its update for its fiscal second quarter.

“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 chief executive Satya Nadella said in an earnings call.

Microsoft’s commercial cloud offerings took in revenue of US$16.7 billion in the quarter, up 34 percent from the same period in the prior year, according to chief financial officer Amy Hood. “We continue to benefit from our investments in strategic, highgrowth areas,” Hood said.

Revenue in Microsoft’s consumer-focused More Personal Computing unit was up 14 percent to US$15.1 billion, helped by a 40 percent surge in money taken by its Xbox video game unit, according to the company.

Overall sales of video games, consoles and accessories hit a record high in the US last year as people hunkered down at home due to the pandemic turned to play.

Sony’s PlayStation 5 and Microsoft’s newest Xbox were released in November, vying for holiday season dominance as the pandemic boosts 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, according to Nadella.

He did not disclose sales figures for new Xbox X and Xbox S consoles, but said they scored the best launch month sales ever for the hardware line.