It has been another massive quarter for Microsoft profits, beating analyst expectations in its latest earnings report. Its cloud business is a major contributor to the boom in revenue, growing by 23 percent compared to last year. It is also seeing strong growth in the its More Personal Computing business, which includes personal computers, Windows, Microsoft Surface hardware and Xbox, which grew 14 percent over the last year.
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Total revenue hit $43.1 billion for the quarter, which increased 17 percent from the same period last year. It is nearly $3 billion more than market expectation. Couple this with a 33 percent increase in profits, up to $15.5 billion, investors are sure to be happy and the stock price is expected to increase over the next quarter. This is now the second quarter in a row where Microsoft has shown a 30 percent increase in profits.
The More Personal Computing business showed revenues of $15.5 billion in the quarter, compared to analyst expectations of $13.55 billion. Xbox also made big strides, as you would expect after the launch of the new Xbox Series consoles. The company saw a 40 percent increase in Xbox content and services sales, as well as an 86 percent increase in hardware sales. As supply of the new generation of consoles is still low, this trend is expected to continue into the rest of 2021.
Microsoft has benefited from the increased demand for personal computers in the last year, due to the impact of the COVID-19 pandemic. Intel, its major silicon partner for personal computers, showed a similar increase in sales over the past several quarters.
In general, the technology sector has been performing well since the onset of the global pandemic as millions of people are forced to work from home amid lockdowns. Analysts expect this to be the case for the rest of the year, after which many companies will work from home permanently and sustain technology sector growth.
