Microsoft Jan-Mar FY19 net income rises 19% to $8.8 bn
26 Apr 2019
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Microsoft Corp on Wednesday reported an 18 per cent year-on-year increase in its net income to $8.8 billion for fiscal third quarter ended 31 March 2019 and a 14 per cent increase in quarterly revenue to $30 billion.
The Redmond, Washington-based company's revenues got a big boost from zooming "commercial cloud" sales, which includes business use of Azure, Office 365 and LinkedIn, which rose 41 per cent to $9.6 billion during the quarter.
Microsoft Corp on Wednesday briefly topped $1 trillion in value for the first time after executives predicted continued growth for its cloud computing business. Microsoft's stock has gained about 23 per cent gain so far this year.
Operating income for the January-March 2019 quarter increased by 25 per cent to $10.3 billion while diluted earnings per share rose 20 per cent to $1.14.
“Leading organisations of every size in every industry trust the Microsoft cloud. We are accelerating our innovation across the cloud and edge so our customers can build the digital capability increasingly required to compete and grow,” said Satya Nadella, CEO of Microsoft.
Microsoft returned $7.4 billion to shareholders in the form of share repurchases and dividends in the third quarter of fiscal year 2019.
“Demand for our cloud offerings drove commercial cloud revenue to $9.6 billion this quarter, up 41% year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to drive growth in revenue and operating income with consistent execution from our sales teams and partners and targeted strategic investments.”
Revenue in productivity and business processes was $10.2 billion and increased 14 per cent (up 15 per cent in constant currency) with Office Commercial products and cloud services revenue increasing 12 per cent (up 14 per cent in constant currency) driven by Office 365 Commercial revenue growth of 30 per cent (up 31 per cent in constant currency).
Office Consumer products and cloud services revenue increased 8 per cent (up 10 per cent in constant currency) and Office 365 Consumer subscribers increased to 34.2 million.
LinkedIn revenue increased 27 per cent (up 29 per cent in constant currency) with record levels of engagement highlighted by LinkedIn sessions growth of 24 per cent.
Dynamic products and cloud services revenue increased 13 per cent (up 15 per cent in constant currency) driven by Dynamics 365 revenue growth of 43 per cent (up 44 per cent in constant currency)
Revenue in Intelligent Cloud was $9.7 billion and increased 22 per cent (up 24 per cent in constant currency), with server products and cloud services revenue increasing 27 per cent (up 29 per cent in constant currency) driven by Azure revenue growth of 73 per cent (up 75 per cent in constant currency).
Enterprise Services revenue increased 4 per cent (up 5 per cent in constant currency).
Revenue in More Personal Computing was $10.7 billion and increased 8 per cent (up 9 per cent in constant currency), with Windows OEM revenue increasing 9 per cent (up 9 per cent in constant currency).
Windows Commercial products and cloud services revenue increased 18 per cent (up 20 per cent in constant currency).
Surface revenue increased 21 per cent (up 25 per cent in constant currency).
Gaming revenue increased 5 per cent (up 7 per cent in constant currency) driven by Xbox software and services revenue growth of 12 per cent (up 15 per cent in constant currency).
Search advertising revenue excluding traffic acquisition costs increased 12 per cent (up 14 per cent in constant currency).
Microsoft shares rose 4.4 per cent to $130.54 in late trading after the forecast issued on a conference call with investors, pushing the company ahead of Apple Inc's $980 billion market capitalisation. The companies and Amazon.com Inc have taken turns in recent months to rank as the world's most valuable US-listed company.
Microsoft's stock has gained about 23 per cent so far this year, after hitting a record high of $125.85 during regular trading hours.
Under chief executive Satya Nadella, the company has over the past five years been shifting from reliance on its once-dominant Windows operating system to selling cloud-based services.
Azure, Microsoft's flagship cloud product, competes with market leader Amazon Web Services (AWS) to provide computing power to businesses.
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