Microsoft notes 'minimal' coronavirus impact as revenue tops expectations
Sales rose 15% to $35B in third quarter, bolstered by strong results in cloud-computing business.
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Microsoft said the coronavirus pandemic had “minimal net impact” on its business in the third quarter as the tech giant posted strong sales that exceeded Wall Street’s expectations.
The company said sales rose 15 percent to $35 billion in the third quarter, bolstered by strong results in its cloud-computing business as Americans relied on virtual workplaces amid shelter-in-place orders. Microsoft’s quarterly earnings per share were $1.40. Wall Street expected revenue of $33.4 billion and earnings per share of $1.26, according to Refinitiv data.
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“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything,” Microsoft CEO Satya Nadella said in a statement. “Our durable business model, diversified portfolio, and differentiated technology stack position us well for what’s ahead.”
As the coronavirus pandemic intensified, Microsoft noted a jump in usage of its cloud services and workplace tools such as Teams, Azure and Windows Virtual Desktop, the company said. The “More Personal Computing” segment, which includes Microsoft Windows, PC accessories and video games, benefited from increased remote work, an uptick in virtual school lessons and a surge in gaming from quarantined users.
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Revenue from the personal computing segment rose 3 percent to $11 billion, outpacing Microsoft’s internal expectations. The company had warned in February that is was unlikely to hit its third-quarter revenue target for the segment, which called for sales of $10.75 billion to $11.15 billion, because the coronavirus pandemic had severely impacted its supply chain.
Microsoft’s Productivity and Business Processes segment, which includes social network LinkedIn and its Office software, saw revenue rise 15 percent to $11.7 billion. LinkedIn’s revenue increased by 21 percent during the third quarter.
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The company was expected to provide an update on its business outlook during an earnings call Wednesday evening.
Microsoft’s third quarter ended March 31. The period included the departure of founder and former CEO, Bill Gates, from Microsoft’s board of directors. Gates said the decision was prompted by his desire to focus on his work combating climate change. He has also taken a leading role in efforts to fight the coronavirus pandemic.
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