Microsoft profits up 21%, giving cushion for gaming push

REDMOND, Wash. (AP) — Demand for Microsoft’s cloud-computing services and work software helped boost its quarterly profits by 21% as the pandemic continued to keep many office workers at home.

The Redmond, Washington company on Tuesday reported fiscal second-quarter profit of $18.8 billion. It posted revenue of $51.7 billion for the October-December period, up 20% from a year earlier.

Microsoft last week announced its plans to buy high-profile game publisher Activision Blizzard for $68.7 billion, an all-cash deal that could be the priciest tech acquisition in history if it withstands scrutiny by antitrust regulators. It could also catapult the Xbox-maker ahead of Nintendo to join Sony and Tencent as one of the three biggest video game companies.

But the financial results revealed Tuesday show it's still business-focused products such as Microsoft's Azure cloud computing platform and its suite of software products that are driving the company's growth.

Net income of $2.48 per share beat Wall Street expectations. Analysts surveyed by FactSet were expecting Microsoft to earn $2.32 per share on revenue of $50.71 billion for the fiscal quarter.

Sales from Microsoft’s cloud computing business segment grew 26% to $18.3 billion in the quarter ending in December.

Microsoft’s productivity segment, which includes its Office suite of workplace products such as email, grew by 19% from the same period a year earlier, to $15.9 billion. The productivity segment also includes revenue from Microsoft’s LinkedIn jobs networking service, which increased 37% from the same time a year earlier.

The company late last year halted its localized version of LinkedIn in mainland China, citing tightening government restrictions affecting the only major Western social networking platform that had...