(Reuters) – Microsoft Corp’s (MSFT.O) on Thursday beat analysts ‘ forecasts for fourth-quarter revenue and earnings, primarily driven by the continued growth of its cloud business, and to send the shares to all-time highs.
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 growth in revenues from online Services was 64% in the fiscal fourth quarter, which ended on June 30, 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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Microsoft have also been predicted in the range of $10.3 billion and $10.5 billion in smart, cloud-revenue for the fiscal first quarter of this year, with an average of, above the analyst estimate of $10.13 billion. The forecast helped send shares of Microsoft, more than 2.6% to an all-time high of more than $140 in after-hours 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.
“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.”
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%.
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.
Microsoft has tried to set itself apart from the WORLD, by combining traditional software, which is running in its own data center, with its Azure product, with a strategy that Chris Voce, an analyst with Forrester, said it helped to power by the performance of the company.
“The hybrid-cloud strategy, and it has resonated with companies, this is a more realistic and flexible approach to doing business,” Voce said.
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.
Mike Spencer, head of investor relations at Microsoft, said Windows, the results have been fueled by customers who are upgrading to Windows 7, which will be retired next year, and as a result of a number of PC customers are stockpiling supplies in anticipation of possible charges.
“What we have seen is that there may be more pent up demand than we had anticipated,” Spencer said. He said that the company does not have any effect on the sales restrictions of Huawei Technologies Co Ltd [HWT.UL] the united states government.
Microsoft’s net income rose to $13.19 billion, or $1.71 per share, in the fourth quarter, to $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)