Microsoft Profit Tops View On Strong Cloud Business, Shares Up 6%

(RTTNews) - Software giant Microsoft Corp. (MSFT), Tuesday reported a profit for the first quarter that trumped analysts' estimates, as CEO Satya Nadella's strategy seems to be working reflected by strong growth in cloud business. Microsoft stock spiked up over 5 percent in after hours trading.

Redmond, Washington-based Microsoft reported first-quarter profit of $4.69 billion or $0.60 per share, down from last year's profit of $4.90 billion or $0.61 per share.

Excluding one-time items, adjusted earnings for the quarter were $0.76 per share, up from $0.70 last year. On average, 28 analysts polled by Thomson Reuters expected earnings of $0.68 per share for the quarter.

Revenues for the quarter rose to $20.45 billion from $20.38 billion last year. Adjusted revenues for the quarter were $22.33 billion, up from $21.66 billion last year. Analysts had a consensus revenue estimate of $21.71 billion for the quarter.

Intelligent Cloud segment, which includes its Azure on-demand computing services, revenues grew 8 percent to $6.4 billion, with Azure revenues surging 116 percent.

Microsoft CEO Satya Nadella said, "We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences. We continue to innovate, grow engagement, and build our total addressable market."

Under Satya Nadella, Microsoft has been transforming itself and focusing more on cloud-based services as PC shipments continue to drop.

Revenues in productivity and business processes grew 6 percent to $6.7 billion. Revenues in More Personal Computing segment, which includes Windows operating system, declined 2 percent to $9.3 billion.

"Our first quarter results showed continued demand for our cloud-based services," said Amy Hood, executive vice president and chief financial officer at Microsoft. "We continue to invest, position ourselves for long-term growth, and execute well across our businesses."

MSFT closed Thursday's trading at $57.25, down $0.28 or 0.49 % on the Nasdaq. The stock, however, gained $3.20 or 5.59% in the after-hours trade.