Microsoft Q3 Profit Tops Wall Street Estimates

(RTTNews) - Software giant Microsoft Corp. (MSFT), Thursday reported an increase in profit for the third-quarter that trumped analysts' estimates, driven largely by strong growth in cloud business, as the software giant continues its transition from key software business to cloud business.

Redmond, Washington-based Microsoft reported third-quarter profit of $7.42 billion or $0.95 per share, up from last year's $5.48 billion or $0.70 per share. On average, 30 analysts polled by Thomson Reuters expected earnings of $0.85 per share for the quarter.

Revenues for the quarter grew 16 percent to $26.82 billion from $23.21 billion last year. Analysts had a consensus revenue estimate of $25.77 billion for the quarter.

Intelligent Cloud segment revenues, which includes its Azure on-demand computing services, increased 17 percent to $7.9 billion, with Azure revenues surging 93 percent. Office commercial products and cloud services revenue increased 14 percent driven by Office 365 commercial revenue growth of 42 percent.

"Our results this quarter reflect the trust people and organizations are placing in the Microsoft Cloud," said Satya Nadella, chief executive officer of Microsoft. "We are innovating across key growth categories of infrastructure, AI, productivity, and business applications to deliver differentiated value to customers."

Under Satya Nadella, Microsoft has been transforming itself and focusing more on cloud-based services.

Revenues in productivity and business processes climbed 17 percent to $9.0 billion. Revenues in More Personal Computing segment, which includes Windows operating system, increased 13 percent to $9.9 billion.

MSFT closed Thursday's trading at $94.26, up $1.95 or 2.11%, on the Nasdaq. The stock, however, slipped $1.26 or 1.34% in the after-hours trade.