Microsoft reported a 33 per cent surge in its fiscal 2024 second-quarter net profit on robust Azure cloud business and double-digit growth in quarterly revenue that surpassed analysts' expectations.
Its net profit jumped to $21.9 billion in the three months to the end of December. The company’s profit was driven by strong productivity and cloud businesses.
Microsoft’s financial year ends in June.
Revenue during the October-December period jumped 18 per cent to more than $62 billion, exceeding analysts' expectations of $61.1 billion.
The company's stock, which has gained more than 10 per cent since the start of this year, dropped more than 1.2 per cent to $403.60 a share in after-hours trading on Tuesday.
Its share price was $408.59 at market close, giving Microsoft a value of $3.04 trillion.
Microsoft surpassed Apple to become the world's most valuable public company on January 12. Apple’s market capitalisation stood at $2.91 trillion on Tuesday.
“We’ve moved from talking about AI [artificial intelligence] to applying AI at scale,” said Satya Nadella, chairman and chief executive of Microsoft.
“By infusing AI [artificial intelligence] across every layer of our tech stack, we are winning new customers and helping drive new benefits and productivity gains across every sector.”
Revenue in Microsoft’s intelligent cloud division, which includes Azure public cloud, increased 20 per cent annually to $25.9 billion, higher than the $25.2 billion consensus of analysts surveyed by StreetAccount.
Sales from Azure and other cloud services, which Microsoft does not report in dollars, grew by about 30 per cent.
Since 2016, Microsoft has committed to building Azure into an AI supercomputer for the world, serving as the foundation of its vision to democratise AI as a platform, the company said.
“Microsoft exceeded both revenue and earnings per share expectations this quarter, thanks to a strong performance in its key Azure cloud business as well as fresh initiatives in AI,” Jesse Cohen, senior analyst at Investing.com, told The National.
“Microsoft is firing on all cylinders and AI is clearly driving growth … the results indicated that AI products are stimulating sales and already contributing to top and bottom-line growth.”
Earlier this month, the Redmond, Washington-headquartered technology company announced the addition of a new Copilot key on the Windows keyboard in a move aimed at supporting the adoption of AI in its hardware products.
The key, which will be available in laptops and personal computers manufactured by Microsoft and its partners, will grant users immediate access to the AI-driven Windows Copilot experience, the company said.
The company’s last-quarter diluted earnings increased 33 per cent to $2.93 a share, compared to the $2.78 a share expected by analysts.
Its operating income surged 33 per cent to $27 billion.
The company's productivity and business processes division, which includes both its Microsoft Office business and revenue from LinkedIn, surged 13 per cent to $19.2 billion in the December quarter.
LinkedIn revenue increased almost 9 per cent annually. Microsoft did not give a dollar figure for its LinkedIn revenue and did not disclose the number of users.
Subscribers to Microsoft 365 Consumer – a bundle of various apps – increased to 78.4 million at the end of the last quarter, up 2.2 per cent on a quarterly basis, the company said.
Sales in the personal computing division surged 19 per cent to $16.9 billion in the quarter.
Search and news advertising revenue excluding traffic acquisition costs increased 8 per cent, while devices revenue decreased 9 per cent.
Xbox content and services revenue increased 61 per cent in the last quarter driven by the $69 billion acquisition of Activision, the gaming company behind Call of Duty, Overwatch and World of Warcraft. Completed in October, the deal was one of the largest tech transactions in history.
Microsoft also returned $8.4 billion to shareholders in the form of share repurchases and dividends in the last quarter.
The company spent more than $6.8 billion on research and development, about 13 per cent of its total sales in the quarter.
Microsoft’s total cash, cash equivalents and short-term investments stood at more than $81 billion as of December 31, compared with $111.2 billion at the end of June.
The view from The National
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
High profile Al Shabab attacks
- 2010: A restaurant attack in Kampala Uganda kills 74 people watching a Fifa World Cup final football match.
- 2013: The Westgate shopping mall attack, 62 civilians, five Kenyan soldiers and four gunmen are killed.
- 2014: A series of bombings and shootings across Kenya sees scores of civilians killed.
- 2015: Four gunmen attack Garissa University College in northeastern Kenya and take over 700 students hostage, killing those who identified as Christian; 148 die and 79 more are injured.
- 2016: An attack on a Kenyan military base in El Adde Somalia kills 180 soldiers.
- 2017: A suicide truck bombing outside the Safari Hotel in Mogadishu kills 587 people and destroys several city blocks, making it the deadliest attack by the group and the worst in Somalia’s history.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Killing of Qassem Suleimani
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The details
Heard It in a Past Life
Maggie Rogers
(Capital Records)
3/5
If you go
- The nearest international airport to the start of the Chuysky Trakt is in Novosibirsk. Emirates (www.emirates.com) offer codeshare flights with S7 Airlines (www.s7.ru) via Moscow for US$5,300 (Dh19,467) return including taxes. Cheaper flights are available on Flydubai and Air Astana or Aeroflot combination, flying via Astana in Kazakhstan or Moscow. Economy class tickets are available for US$650 (Dh2,400).
- The Double Tree by Hilton in Novosibirsk ( 7 383 2230100,) has double rooms from US$60 (Dh220). You can rent cabins at camp grounds or rooms in guesthouses in the towns for around US$25 (Dh90).
- The transport Minibuses run along the Chuysky Trakt but if you want to stop for sightseeing, hire a taxi from Gorno-Altaisk for about US$100 (Dh360) a day. Take a Russian phrasebook or download a translation app. Tour companies such as Altair-Tour ( 7 383 2125115 ) offer hiking and adventure packages.
The specs
Engine: 2.9-litre, V6 twin-turbo
Transmission: seven-speed PDK dual clutch automatic
Power: 375bhp
Torque: 520Nm
Price: Dh332,800
On sale: now
Coffee: black death or elixir of life?
It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?
Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.
The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.
The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.
Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver.
The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.
But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.
Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.
It also raises blood pressure, which is largely problematic for people with existing conditions.
So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.
Rory Reynolds
