Strong cloud business: Microsoft exceeds expectations in the fourth fiscal quarter

Revenue increases 13 percent to $ 11.2 billion. However, the profit declines by 15 percent. The balance sheet for the fiscal year 2020 nevertheless shows a profit increase of 13 percent.

Microsoft has released its fourth quarter 2020 results. The company increased its sales by 13 percent to $ 38 billion. Meanwhile, net income and earnings per share shrank 15 percent to $ 11.2 billion and $ 1.46, respectively. However, both categories exceed analyst expectations.

Microsoft (Image: Microsoft)They had predicted a $ 1.37 excess per share on $ 36.5 billion in earnings. Nevertheless, investors were disappointed with the current key figures. In after-hours trading, the Microsoft share price slipped 2.24 percent, or $ 4.74, to $ 207.01. The paper had ended the trading day with an increase of 1.44 percent.

The COVID-19 pandemic and the resulting trend towards home Office brought high demand to the cloud division. Intelligent Cloud Group’s revenue increased 17 percent to $ 13.4 billion. The cloud business thus asserted itself as the largest source of revenue. At $ 5.34 billion, the cloud was also the most profitable business.

The Windows division improved 14 percent to $ 12.9 billion. Its operating profit climbed 15 percent to $ 4.09 billion. Productivity and Business Processes revenue was $ 11.75 billion, up 6 percent, which reduced operating income by more than 8 percent.

Microsoft even increased Azure revenue by 47 percent, while revenue from server products and cloud services skyrocketed by 19 percent. The Office Commercial and Office Consumer segments grew by 5 and 6 percent, respectively. The sale of OEM licenses also brought in 7 percent more sales than in the same period last year. The hardware division Surface even achieved an increase of 28 percent.

“The past five months have made it clear that technology intensity is the key to corporate resilience. Companies that build their own digital skills will recover faster and emerge stronger from this crisis, ”said Microsoft CEO Satya Nadella on the quarterly report. “We are the only company with an integrated, modern technology stack – powered by cloud and AI and supported by security and compliance – that helps every company transform and rethink how it can meet customer needs.”

Microsoft ended the fiscal year with a net profit of $ 44.3 billion, 13 percent more than in the previous year. Revenue climbed 14 percent to $ 143 billion.

In the first fiscal quarter of 2021, the software company is now targeting sales of between $ 35.15 and $ 36.05 billion. The previous year’s quarter’s earnings were $ 33.06 billion.


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