Microsoft’s third quarter net profit increased by 43.7 percent on a year-on-year basis on strong cloud, gaming and personal computing businesses as well as a net income-tax benefit.
Net profit surged to $15.5 billion in the three months to March 31. Revenue during the period soared 19 per cent to more than $41.7bn, exceeding the company’s own guidance as well as the analysts’ average estimate of $41.03bn. The company also registered a $620 million net income-tax benefit.
The January-March period marked the Redmond-headquartered company’s 15th straight quarter of double-digit revenue growth. The company’s stock was down nearly 3 percent in after hours trading. The share price has increased more than 50 percent in the past year giving the company a market capitalisation of $1.98 trillion.
In its guidance for the fourth quarter, the company forecasts revenue in the range of $43.6bn to $44.5bn, which is higher than a $42.9bn consensus among analysts polled by Refinitiv. Sales in its PC business, which includes Xbox content, services and revenue from sales of its Surface device and search advertising, grew 19 per cent annually to $13bn. PC sales have picked up as buyers upgrade their devices with the rise of remote working and home learning.
Revenues in the company’s intelligent cloud business increased 23 per cent year-on-year to $15.1bn.
The company’s productivity and business processes division, which includes both its Microsoft Office business and revenue from LinkedIn, increased 15 per cent to $13.6bn.
LinkedIn revenue grew by almost 25 percent annually. Microsoft did not give a dollar figure for LinkedIn revenue and did not disclose the number of users.
The company returned $10bn to shareholders in the form of share repurchases and dividends in the third quarter, a yearly increase of 1 per cent. It invested almost $5.2bn on research and development during the quarter, almost $317 million more than the same period last year.
