Nasdaq-listed Microsoft beat expectations yet again in the final quarter of fiscal 2021 to 30 June as large cap technology stocks continue to reap rewards of the world’s digital shift. Microsoft, the world’s largest software company worth $2.16 trillion, reported revenues 21% higher year-on-year of $46.2 billion and operating profit of $19.1 billion, up 42%.

The analyst consensus for the quarter was for operating profit of $17.4 billion on $44.3 billion revenue.

All three of the company’s business units (Productivity & Business Processes, Intelligent Cloud and More Personal Computing) again outperformed. This included Office 365 commercial revenue growth of 25% (20% at when you strip out currency swings), Dynamics 365 up 49% (42%), Azure up 51% (45%), LinkedIn up 46% (42%) and Search advertising up 53% (49%).

According to analysts, one slight surprise was a 3% decline in revenues from Windows sold to device manufacturers for pre-installation on PCs and laptops. Declines were even sharper for its Surface device, with the 20% (23%) fall put down to supply chain constraints in a good demand market.

Total Commercial Cloud revenue grew 36% to $19.5 billion.

‘YOU CAN’T HAVE EVERYTHING’

‘Microsoft has rounded off the year with another smashing quarter with strong, mostly better-than-expected growth across its focus areas with the group continuing to benefit from the shift to the Cloud and a return in advertising in recruitment (LinkedIn) and more broadly,’ said Megabuyte’s Lee Prout.

‘The decline in Windows OEM revenues is a bit of a disappointment but this is out of Microsoft’s control and I guess you can’t have everything,’ he said.

Microsoft stock, which had rallied nearly 7% into these results, dipped a little less than 1% to $286.54, just a fraction off its $289.64 all-time high recorded just days ago (23 July).

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Issue Date: 28 Jul 2021