 |
| Microsoft makes big profits amid chip shortages |
Microsoft announced its financial results for the fourth quarter of 2021, reporting revenue of $46.2 billion and net income of $16.5 billion.
Sales increased 21% and net income increased 47%. While cloud and office services boosted Microsoft's revenue, it's clear that the dearth of global chips is casting a shadow over other places.
As the PC market sees significant growth this year for the first time in 10 years, there are recent signs that laptop and desktop PC sales may slow again amid a global chip shortage.
Microsoft's performance on Windows this quarter is a testament to that. Windows OEM sales are down 3%. Sales to non-professional Windows OEMs are down 4% and Windows Pro OEM sales are down 2%.
However, sales of commercial Windows products and cloud services increased by 20%. This includes companies choosing Microsoft 365 under a multi-year contract and reflects the company's efforts to bundle Office with Windows.
Microsoft is now planning to support the development of the PC market with the launch of Windows 11, which is expected to appear on new devices in October.
Surface sales fell 20% in the quarter due to supply constraints.
The Xbox Series X and Xbox Series S game consoles have now entered the third quarter of sales. Hardware sales increased 172%.
"The Xbox Series X and Xbox Series S are among the best-selling gaming consoles of all time," said CEO Satya Nadella. The platform sells more than any previous generation.
Microsoft's total revenue from games increased by 11%. However, Xbox content and services revenue fell 4%.
Microsoft is making huge profits
Microsoft mentioned the growth in Xbox Game Pass subscriptions. The company did not reveal the new Game Pass subscriber number. It did so after the company announced in January that it had 18 million subscribers.
Sales with cloud services, Office and LinkedIn have increased dramatically. Office group sales increased 20%. Office group consumer sales increased 18%.
The total number of Microsoft 365 home users also increased to 51.9 million, an increase of 22% from the previous year.
Revenue from servers and cloud services increased by 34% and Azure alone by 51%.
The smart cloud business totals $17.4 billion, or 37% of the company's total revenue.
LinkedIn continues to grow, with revenue increasing 46% year over year. The reason for this is the increased demand for advertising after the recession at the beginning of the epidemic last year.