Microsoft tops expectations on demand for cloud-based services

Profit rises to €9.6bn and revenue hits €27.7bn, with sales of Azure up 59%

Chief executive Satya Nadella has spent the past five years shifting Microsoft to focus on cloud-based software. Photograph: EPA

Chief executive Satya Nadella has spent the past five years shifting Microsoft to focus on cloud-based software. Photograph: EPA

 

Microsoft posted sales and profit that topped analysts’ projections, lifted by demand for Azure cloud-computing programmes and internet-based versions of Office productivity software.

Profit in the first quarter, which ended on September 30th, rose to $10.7 billion (€9.6 billion), or $1.38 a share, compared with the $1.24 per-share average estimate of analysts polled by Bloomberg.

Revenue rose 14 per cent to $33.1 billion (€27.7 billion), the company said on Thursday in a statement, better than the $32.2 billion average prediction.

Azure sales rose 59 per cent, compared with 64 per cent in the previous period and 73 per cent growth in the quarter before that.

Microsoft employs more than 2,000 people in the Republic.

Chief executive Satya Nadella has spent the past five years shifting Microsoft to focus on cloud-based software, which lets customers avoid having to buy and run their own hardware and applications. As growth decelerates, the company is trying to improve margins and rack up a steady stream of large deals for Azure, which competes with Amazon’s web services division.

Sales of the subscription-based Office 365, Microsoft’s other major cloud business, to corporate customers jumped 25 per cent.

“They’ve made the migration from core enterprise software to this cloud focus,” said Daniel Morgan, senior portfolio manager at Synovus Trust.

“You look at cloud, at expanding margins, at the corporate move to Windows 10, and at least the PC market was better than expected in the quarter.”

Microsoft shares were little changed in extended trading. – Bloomberg