WASHINGTON: Microsoft reported a 48 per cent increase in net profit in the first quarter of its fiscal year, driven by strong growth in its cloud business.
Net profit jumped to $20.5 billion in the three months to the end of September, about $6.6bn more than the prior year period, and was up 24.5 per cent on a quarterly basis. This is the company’s most profitable quarter, report agencies.
The company’s stock, which has increased more than 45 per cent in the past 12 months, reached nearly $315 a share in extended-hours trading, up by more than 1.5 per cent.
Digital technology is a “deflationary force in an inflationary economy,” Microsoft’s chairman and chief executive Satya Nadella said.
“Businesses — small and large — can improve productivity and the affordability of their products and services by building tech intensity,” he said.
Revenue in the company’s intelligent cloud business increased 31 per cent year-on-year to $17bn in the first quarter and its server products and cloud services revenue increased almost 35 per cent.
The company’s operating income grew 27 per cent to $20.2bn in the previous quarter from the prior year period while the diluted earnings per share was up 49 per cent on an annual basis at $2.71.
LinkedIn revenue increased almost 42 per cent annually. Microsoft did not give a dollar figure for its LinkedIn revenue and did not disclose the number of users.
This month, LinkedIn said it will shut its local version of the platform in China by the end of this year as the company faced a “challenging operating environment” and “greater compliance requirements” in the world’s second-largest economy.
The world’s largest professional network, which launched its localised version in China in February 2014, will roll out a new stand-alone jobs application for China — InJobs — later this year. The Asian country is LinkedIn’s third-largest market, Statista reports.
Microsoft 365 Consumer subscribers increased to 54.1 million at the end of the last quarter, the company said.
Microsoft also returned $10.9bn to shareholders in the form of share repurchases and dividends in the last quarter, a yearly increase of 14 per cent compared to the prior year period. Sales in the personal computing division rose 12 per cent to $13.3bn in the quarter, the company said.
Search and news advertising revenue increased by 40 per cent annually, while Xbox content and services revenue increased 2 per cent in the first quarter.
Surface revenue decreased 17 per cent yearly, primarily driven by supply chain constraints.