Microsoft on Thursday US time reported revenue and profit above market expectations, as sales of its hardware and cloud-computing services helped to offset a decline in the company's core Windows business.
Sales of Windows to computer manufacturers to install on new PCs fell 19 percent in the quarter, reflecting a sharp dip from a year ago when Windows got a brief boost from consumers rushing to buy new machines after Microsoft stopped support for the 14-year-old XP operating system.
That decline was offset by higher revenue from its Surface tablet, back-end server software and cloud-related offerings such as its online Office 365 suite of applications.
The company said its commercial cloud-related revenue for the quarter more than doubled, and was now running at US$6.3 billion a year. Amazon.com said on Thursday US time its quarterly cloud revenue rose almost 50 percent to US$1.57 billion, suggesting a similar annual number.
Microsoft's overall revenue rose 6 percent to US$21.7 billion, above Wall Street's average forecast of US$21.1 billion, according to Thomson Reuters I/B/E/S.
Taking out the effects of the strong US dollar on currency rates, Microsoft said revenue would have risen 9 percent.
"The company beat across the board," said FBR Capital markets analyst Daniel Ives. "[Wall Street] will cheer these results as it appears Microsoft is back on the right track after a head-scratching performance last quarter."
Shares rose 3.1 percent to US$44.70 in after-hours trading.
Earnings per share declined to 61 US cents per share from 68 US cents in the year-ago quarter. Analysts had expected 51 US cents, on average.
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