Microsoft boasts of Surface, Azure growth

January 31, 2019 | 11:37

Tags: #amy-hood #azure #cpu-shortage #earnings #financial #satya-nadella #share-price #surface #windows #xbox

Companies: #microsoft

Microsoft has boasted of a barnstorming second quarter to its 2019 financial year, with revenue up 12 percent year-on-year and major growth in its Surface and gaming divisions - but blames Intel's inability to meet CPU demand for a slip in Windows revenue.

In its latest financial report, Microsoft has declared $32.5 billion in revenue, an increase of 12 percent year-on-year, with an 18 percent increase in operating income to $10.3 billion for the fourth quarter of its 2019 financial year. Much of this growth is attributed to the company's productivity and business divisions: Its Office 365 commercial offering grew 34 percent, its recently-acquired LinkedIn subsidiary 29 percent, and its Azure cloud computing arm a whopping 76 percent - a real sign of success, the company claims.

'Our strong commercial cloud results reflect our deep and growing partnerships with leading companies in every industry including retail, financial services, and healthcare,' crowed Satya Nadella, Microsoft chief executive, during the company's earnings call. 'We are delivering differentiated value across the cloud and edge as we work to earn customer trust every day.'

The company's personal computing business units, however, didn't fare so well: Although revenue for its own-brand Surface hardware grew a healthy 39 percent, and its Xbox software and services sales 31 percent, the company's sales of Windows licences to original equipment manufacturers (OEMs) dropped five percent - thanks, Microsoft's Amy Hood explained during the call, to 'continued market impact from constrained chip supply' which will likely slow growth into the next quarter - bringing the overall growth down to seven percent year-on-year.

Microsoft's share price, which had closed up 3.34 percent for the day, dropped 2.12 percent in pre-market trading upon publication of its earnings.

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