Microsoft Corp.’s (NASDAQ:MSFT) third-quarter sales rose 19%, lifted by strong demand for cloud-computing services and the biggest quarterly jump in personal computer shipments in two decades.
Sales at the Redmond, Washington-based software company in the three months ended March 31 rose to $41.7 billion U.S. That compared with the $41.1 billion U.S. average estimate of Wall Street analysts.
Microsoft’s Azure, which sells internet-based cloud computing services to corporations, saw sales climb by 50%, matching the gain posted in the previous quarter. While Azure has been growing steadily, it faces competition for big deals from Amazon, the dominant cloud service, and Google.
Revenue in Microsoft’s personal computing unit rose 19% to $13 billion U.S. in the quarter. Personal computing sales, once a drag on Microsoft’s results, have picked up as buyers upgrade gear for school and work. Overall personal computer shipments rose 32% in the quarter, the highest level in 20 years.
Still, a worldwide microchip shortage is limiting Microsoft’s ability to build enough of its new Xbox video game console that was introduced last November. While Xbox hardware sales grew 232% in the quarter, inventory of those machines remains tight, and that will continue into the June quarter, the company said.
Net income in the most recent quarter came in at $15.5 billion U.S., or $2.03 U.S. a share, Microsoft said. Analysts had expected net income of $1.78 U.S. per share.
Microsoft shares were down about 2% in pre-market trading following the earnings report. The stock has increased more than 50% in the past year, and the company’s market value is now approaching $2 trillion U.S.
