Microsoft sales climb 17%, lifted by robust cloud demand

Microsoft said fiscal secondquarter sales rose 17%, a faster clip than analysts projected, thanks to buoyant demand for corporate cloud-computing services and software tools that support at-home workers. Shares soared in late trading.

Revenue in the period ended Dec. 31 rose to $43.1 billion, the Redmond, Washington-based software maker said Tuesday in a statement. That exceeded the $40.2 billion average estimate of analysts polled by Bloomberg, and marked Microsoft’s 14th straight quarter of double-digit revenue growth. Net income was $15.5 billion, or $2.03 a share. Analysts had predicted $1.64.

Growth in the company’s Azure cloud-computing division jumped 50%. Microsoft has benefited as many corporate clients have accelerated a shift to the cloud, where they can store data and run applications via the internet, and as businesses set up work teams with online productivity tools and teleconferencing software. Personal-computer sales also surged in the quarter, boosting the company’s flagship Windows operating-system business.

“Cloud is going well, said Mark Moerdler, an analyst at Sanford C. Bernstein Co. “Margins have moved up nicely. There really isn’t a lot that hasn’t gone well.”

Microsoft shares climbed about 5% in extended trading following

the report. The stock rose 5.7% during the quarter, compared with a 12% gain in the S&P 500 Index. Stock increases earlier in

the year left the company with an expanded price-to-future-earnings multiple that is larger than peers like Facebook and Google, said Bloomberg Intelligence’s Anurag Rana.

Sales in each of Microsoft’s three divisions exceeded the average estimates of analysts polled by Bloomberg. Corporate versions of Office 365 cloudbased software saw revenue rise 21% in the quarter, the company said.

The pandemic caused some companies to speed up moves to the cloud and upgrades to internetbased collaboration software. Even though the market is growing, Microsoft continues to face competition from Amazon.com Inc.’s AWS and a renewed cloud-infrastructure push at Alphabet Inc.’s Google. Azure’s revenue gain in the recent quarter exceeded the 43% growth rate predicted by analysts, and outpaced the prior period’s increase of 48%.

Global PC shipments jumped 26% in the quarter, according to research firm IDC, with demand fueled by the continued need to work and learn from home.