Microsoft Q3 Profit, Revenue Beat Street Driven By Cloud Growth

(RTTNews) - Software giant Microsoft Corp. (MSFT), Wednesday reported a profit for the third quarter that trumped Wall Street's estimates, as revenues also trounced expectations driven by growth in cloud business.

Redmond, Washington-based Microsoft reported third-quarter profit of $8.81 billion or $1.14 per share, up from last year's profit of $7.42 billion or $0.95 per share.

On average, 29 analysts polled by Thomson Reuters expected earnings of $1.00 per share for the quarter.

Revenues for the quarter grew 14 percent to $30.57 billion from $26.82 billion last year. Analysts had a consensus revenue estimate of $29.84 billion for the quarter.

"Leading organizations of every size in every industry trust the Microsoft cloud. We are accelerating our innovation across the cloud and edge so our customers can build the digital capability increasingly required to compete and grow," said CEO Satya Nadella.

Intelligent Cloud segment revenues, which includes its Azure on-demand computing services, increased 22 percent to $9.7 billion, with Azure revenues surging 73 percent.

Revenues in Productivity and Business Processes rose 14 percent to $10.2 billion, with office commercial products and cloud services revenue up 12 percent driven by Office 365 commercial revenue growth of 30 percent.

Revenues in More Personal Computing segment, which includes Windows operating system, increased 8 percent to $10.7 billion.

"Demand for our cloud offerings drove commercial cloud revenue to $9.6 billion this quarter, up 41% year-over-year," said Amy Hood, executive vice president and chief financial officer of Microsoft. "We continue to drive growth in revenue and operating income with consistent execution from our sales teams and partners and targeted strategic investments."

MSFT closed Wednesday's trading at $125.01, down $0.43 or 0.34%, on the Nasdaq. The stock, however, gained $3.63 or 2.90% in the after-hours trading.