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Microsoft

Microsoft beats forecasts in shift to Cloud from Windows

PUBLISHED : Friday, 27 January, 2017, 7:00am
UPDATED : Friday, 27 January, 2017, 7:00am

Microsoft reported yet another quarter of stronger-than-expected results on Thursday, thanks to its focus on online services and business software rather than its legacy Windows operating system.

Microsoft says it earned US$5.2 billion, or 66 cents per share, in the final three months of the year, up from $5.02 billion a year earlier.

Earnings, adjusted for non-recurring costs, came to 84 cents per share. The average estimate of 16 analysts surveyed by Zacks Investment Research was for 79 cents per share.

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The software maker posted revenue of $24.1 billion in the period. Adjusted revenue was $26.1 billion, also topping Wall Street forecasts. Nine analysts surveyed by Zacks expected $25.2 billion.

As sales of Windows PCs decline, CEO Satya Nadella has been pouring money and resources into remote data centres that deliver the company’s services online to smartphones, tablets and other devices.

Businesses and government agencies are increasingly turning to such “cloud computing” services, which again helped boost Microsoft’s revenue, just as it did in the previous quarter.

Microsoft closed its $26 billion purchase of professional networking service LinkedIn in December.

Shares of the Redmond, Washington, company have climbed slightly more than 3 per cent since the beginning of the year, roughly matching the Standard & Poor’s 500 index.

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The company’s stock closed at $64.27 on Thursday, up 59 cents for the day. Over the last 12 months, though, the shares have increased by 23 per cent, thanks to investor confidence in Nadella’s efforts to focus on cloud services and business software. The stock increased 1 per cent, to $64.90, in extended trading after the results came out.