(Reuters) – Microsoft Corp’s (MSFT.(O) beat analysts ‘ estimates for fourth-quarter sales and profit on Thursday, even as its sales growth began to slow in order for the cloud product, Azure, and Office software.
A FILE PHOTO of The Microsoft mark is displayed at the top of the Microsoft Theater in Los Angeles, California, USA, October 19,2018. REUTERS/Mike Blake/File Photo
Since Chief Executive Satya Nadella took over at the end of 2014, Microsoft has been a move away from the Windows-based operating system, the software and cloud services, where customers do their calculations, data centers, managed by Microsoft. The company’s market value has almost quadrupled since Nadella became CEO, and, Microsoft, has avoided much of the regulation and the antitrust investigation centered on other major tech companies, Alphabets Inc (GOOGL.O) and Apple Inc (AAPL.(O) and Facebook Inc (FB.D).
The growth in revenues from online Services was 64% in the reported quarter, compared with 89% last year and 73% in the previous quarter. Microsoft does not provide an absolute revenue number for the Services, and the engage in the “intelligent cloud system,” which had sales of $11.4 billion, compared with expectations of an analyst, $11.0 billion, according to the Refinitiv of the data.
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Shares of Microsoft rose 1.2% to $138.13, in extended trading.
Cloud growth is driven to Microsoft’s market value past $1 trillion for the first time in the month of April. On Thursday, Microsoft’s Azure-based business segment for the first time ever, reported to be a light quarter, revenue from the Windows business.
In the cloud-computing company, and Azure as the chief rival is Amazon Web Services, which dominates the industry, with a 32.8% market share, according to research firm Canalys. Microsoft has had a share of 14.6%, while Google is 9.9%. The company also has to compete against Amazon.com Inc. (AMZN.(O) for a $10 billion contract with the U.S. Department of Defense (dod).
Microsoft has also gained ground in the last few years, due to the combination of the online Services, computing, service, developers, along with microsoft Office and other software products to end-users, such as the $2-billion cloud deal was signed with AT&T Inc (T. N) earlier this week.
“The push was clear, but they have done it,” said Hal Eddins, chief economist for Microsoft is a shareholder of Capital Investment Counsel. “The cloud is a major driver of growth for them, and they seem to have been painted with a big bullseye on the backs of the WORLD.”
Sales of microsoft’s productivity software unit, a jump of 14.3% to $11.05 billion, driven by double-digit revenue growth for LinkedIn and Office 365. Analysts on average had expected revenue of $ 10.71 billion, according to IBES data, Refinitiv.
In the meantime, in the pc business, and the home Windows grew to a total of $11.3 billion, compared to the analyst estimate of $10.98 billion. The device also includes an Xbox one gaming consoles and the Bing online search service and in the area of the house.
Microsoft’s net income rose to $13.19 billion, or $1.71 per share, in the quarter ended June 30, from $ 8.87 billion, or $1.14 per share, a year earlier. (a little bit.m/2JDI8Jq)
With the exception of the items, the company earned $1.37 per share, topping estimates of $1.21 per share.
Total revenue increased by 12% to $33.72 billion, above the average of analysts ‘ estimates of $32.77 billion.
Reporting Vibhuti Sharma in Bengaluru and Stephen Nellis in San Francisco; Editing by Anil D’silva and Matthew Lewis)