Microsoft Corporation (NASDAQ: MSFT) stock rose over 2.2% on 27th Jan, 2021 pre-market session (Source: Google finance) after the company’s fiscal second-quarter net income rose more than 30% to $15.5 billion, beating Wall Street’s expectation of net income of $12.6 billion. The company has posted record quarterly sales driven by pandemic-fueled demand for videogaming and accelerated adoption of its cloud-computing services as businesses continued to embrace new digital tools during the health crisis. In addition to its videogaming and cloud-computing products, the company has delivered strong sales of its Surface laptops as people bought devices to facilitate working from home and distance learning. The gaming revenue was up 51% to $15.1 billion, topping even the $14.6 billion its cloud-segment delivered. The revenue from licenses for Windows software rose 1%, which has beaten Microsoft’s internal projections, in matching up against a strong prior-year quarter when customers were upgrading the software after the company began phasing out support for Windows 7. LinkedIn, the business-focused social-media network owned by Microsoft, reported a 23% rise in sales, outpacing the growth of the prior quarter.
Moreover, Office Commercial products and cloud services revenue grew 11% (up 9% in constant currency) driven by Office 365 Commercial revenue growth of 21% (up 20% in constant currency). Office Consumer products and cloud services revenue rose 7% (up 6% in constant currency) and Microsoft 365 Consumer subscribers increased to 47.5 million. Dynamics products and cloud services revenue rose 21% (up 18% in constant currency) driven by Dynamics 365 revenue growth of 39% (up 37% in constant currency). Server products and cloud services revenue rose 26% (up 24% in constant currency) driven by Azure revenue growth of 50% (up 48% in constant currency). Windows Commercial products and cloud services revenue rose 10% (up 8% in constant currency) and Xbox content and services revenue grew 40% (up 38% in constant currency).
MSFT in the second quarter of FY 21 has reported the adjusted earnings per share of $2.03, beating the analysts’ estimates for the adjusted earnings per share of $1.64, according to figures compiled by Thomson Reuters. The company had reported the adjusted revenue growth of 17 percent to $43.1 billion in the second quarter of FY 21, beating the analysts’ estimates for revenue of $40.2 billion.
Additionally, the company has returned $10 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2021, which represents an increase of 18% compared to the second quarter of fiscal year 2020.