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Microsoft earnings beat analyst expectations

Microsoft’s recently reported fourth-quarter results exceeded analysts’ expectations, with total revenue growing by 17 percent year over year to $30 billion. (Associated Press)
Microsoft’s recently reported fourth-quarter results exceeded analysts’ expectations, with total revenue growing by 17 percent year over year to $30 billion. (Associated Press)
By Rachel Lerman Seattle Times

Microsoft reported third-quarter financial results Thursday that surpassed analyst expectations, once again rising on the strong growth in its cloud products.

Microsoft said revenue from its Azure cloud computing service grew 93 percent during the quarter, a trend that has marked the company’s momentum in the increasingly important market for the past several quarters. Its “commercial cloud” group – which encompasses Azure, Office 365 and Dynamics 365 – grew 58 percent to $6 billion during the quarter.

Microsoft, which is widely believed to be the second-largest cloud provider behind Amazon Web Services, does not break out specific Azure or Office 365 revenue numbers.

But it did say that it now has 135 million active users of its Office 365 commercial product, up from 120 million users in October.

The Redmond company reported a profit of $7.4 billion, or 95 cents a share, on revenue of $26.8 billion for the quarter. Analysts were expecting Microsoft to report earnings of 85 cents a share on $25.8 billion in revenue.

Revenue was up more than 15 percent from the same period last year, and profit increased 35 percent.

The company announced a major reorganization at its headquarters late last month, which put an even stronger focus on the cloud while de-emphasizing its long-standing Windows operating system business.

But the stalwart Windows is still a steady driver for the company. Microsoft’s “more personal computing” group – which includes Windows, gaming and Surface – reported the largest share of revenue with $9.9 billion, a 13 percent increase from last year.

Microsoft’s stock closed up more than 2 percent at $94.26 in Thursday’s regular trading session. In after-hours trading, its stock initially dropped as much as 2 percent, but stabilized before the company’s conference call with analysts.

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