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Apr 29, 2020

Microsoft sales rise as remote working buoys cloud services

Facebook holds steady, Microsoft sees sales rise amid pandemic

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Microsoft Corp. said quarterly sales and profit rose, buoyed by demand for internet-based software and cloud services needed to accommodate a shift to remote working during the coronavirus crisis.

Profit in the period ended March 31 rose to US$10.8 billion, or US$1.40 a share, the company said Wednesday in a statement. Sales rose 15 per cent to US$35 billion. That compares with average Wall Street estimates for US$1.28 a share in profit and US$34 billion in sales, according to Bloomberg data. Analysts had reduced projections in the past month after Microsoft cautioned sales wouldn’t meet forecasts in its PC software and hardware business.

Microsoft is better positioned to weather the COVID-19 pandemic than some technology peers because Chief Executive Officer Satya Nadella for years has been moving the company to focus on cloud software. As the virus shut down workplaces, the company has seen increasing demand for internet-based Office and conferencing software that keeps employees connected and productive at home. Much of Microsoft’s software is also now sold by subscription, which means customers generally keep paying even amid a slowdown.

“Microsoft revenue is less consumer-centric and far more recurring, and when you go to a subscription, you have a pay-for-it-or-lose-it mindset,” said Mark Moerdler, an analyst at Sanford C. Bernstein & Co.

Microsoft shares rose 1.5 per cent in extended trading following the report. Earlier, they closed at US$177.43 in New York. The stock has gained more than 13 per cent in 2020, giving the company a market value of US$1.35 trillion — making it the biggest U.S. publicly traded company.