Microsoft Cloud sees business growth, but supply issues for Reuters’ Xbox continue

Reuters. File photo: The Microsoft logo appears in an office building in New York City, USA on July 28, 2015. REUTERS / Mike Segar

Written by Subrata Patnaik and Stephen Nellis

(Reuters) – Microsoft Corp. predicted a strong end to the calendar year on Tuesday thanks to its growing cloud business but said supply chain problems plagued the core units of dogs such as its Surface laptops and Xbox gaming consoles.

The company lost Wall Street expectations for the Fist quarter ending Sept. 30, with epidemic-induced demand to drive sales of the software giant’s cloud-based services.

Contracts for cloud services provided by Microsoft (NASDAQ :), Inc.’s AWS and Alphabet (NASDAQ 🙂 Inc.-owned Google Cloud have increased since last year when COVID-19 epidemic closed offices and schools, Pushing more activity online.

Azure’s first-quarter revenue growth, the company’s flagship cloud-computing business, came in at 48% on fixed currency which could beat analysts ’47.5% estimates, according to data from Visible Alpha. Amy Hood, Microsoft’s executive vice president and chief financial officer, said the company expected “broad-based growth” for the unit in the second quarter of fiscal year.

Azure’s growth rate is the best direct measure of competition with competitors such as AWS and Google Cloud because Microsoft does not generate revenue from cloud-computing units.

Microsoft has been seen to hold on to the growing challenge of Google Cloud. Google Cloud reported on Tuesday Revenue rose 45% to $ 4.99 billion, but failed to comply Done. মান 5.2 billion estimate.

Other software units of the firm that have Windows software, Teams messaging service and LinkedIn professional social networking platform also meet the expectations of revenue analysts.

Supply chain problems in most parts of the global technology industry have had mixed consequences for Microsoft.

Hood said Microsoft has continued to grow its cloud computing margins despite higher data center construction costs as it continues to add more profitable services to those data centers. Hood added that the company was able to deliver more Xbox S and X gaming consoles than expected in the first quarter – sales of gaming consoles and accessories rose 166% as the company continued to see strong demand for new models after the epidemic hit. Millions for entertainment at home.

But Microsoft and its rivals have been unable to meet demand due to the global chip crisis. Hood told Reuters the company expects the company to surpass supply demand for the Xbox in the second quarter, including Christmas.

He added that sales of the company’s Surface Computer, which fell 17% in the first quarter of the fiscal year, could sink in the second quarter, hitting premium items in the supply chain deficit lineup.

Microsoft’s revenue from selling Windows to PC makers grew 10% year-on-year, beating the overall PC market by only 3.9% over the same period due to supply constraints, according to data from IDC.

Hood said the company has been able to surpass the PC market due to its ability to sell Windows licenses intended for corporate customers, where it gets more revenue per license and has a better market share.

Overall, revenue rose 22% to $ 45.32 billion in the first quarter ended Sept. 30, exceeding expectations of about $ 43.97 billion.

Net income rose to 20.51 billion, or $ 2.71 per share. The company said its results included a আয় 3.3 billion net income tax benefit.

On a consistent basis, it gained $ 2.27 per share, exceeding analysts’ expectations of $ 2.07 per share.

For the second quarter of fiscal, Microsoft forecast a midpoint of $ 18.23 billion in revenue for its intelligent cloud business for the second quarter of fiscal year, well above the $ 17.84 billion estimate, according to referential data.

First-quarter revenue from “Intelligent Cloud” rose 31% to $ 17 billion. Analysts had expected a figure of $ 16.58 billion, according to referential data.

Microsoft’s software apps and Windows-centric segment forecasts for য়েন্ট 15.83 billion and $ 16.55 billion midpoint, respectively, were also above the $ 15.40 billion and $ 15.51 billion refinitive estimates, respectively.

The company’s shares, which have risen nearly 40% this year, rose slightly in extended transactions.

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