Microsoft Profit Tops Expectations--Update
January 28 2016 - 4:00PM
Dow Jones News
By Chelsey Dulaney
Microsoft Corp. on Thursday reported better-than-expected
adjusted earnings and revenue for its latest quarter, as strength
in its cloud business continued to drive growth.
Shares rose 6.2% to $55.30 a share in after-hours trading.
Microsoft, like many mature tech companies, has been struggling
to grow. The software maker is focusing on its cloud-services
segment, which includes services like Azure and was recently broken
out into a new reporting segment.
In the fiscal second quarter, revenue for Microsoft's
"Intelligent Cloud" segment rose 5% to $6.34 billion. On a
constant-currency basis, revenue grew 11% but slowed from the 14%
growth it posted in the first quarter.
Microsoft revenue for Azure, its cloud-computing platform,
surged 140% excluding currency impacts, while server products and
cloud services revenues were up 10%.
That comes as Microsoft's best-known business--software for
personal computers--continued to weaken. That segment, which also
includes its Xbox videogame consoles and popular Surface Pro,
posted a 2% decline in revenue excluding currency impacts. The
segment was hurt by lower Windows revenue and the company's
decision to scale back its smartphone business, offset in part by a
29% increase in Surface revenue.
Operations Chief Kevin Turner said Microsoft experienced a
"strong holiday season," citing growth at Xbox and Surface, which
recently launched the Surface Pro 4 and Surface Book.
In all for the period ended Dec. 31, Microsoft reported a profit
of $5 billion, or 62 cents a share, down from $5.86 billion, or 71
cents a share, a year earlier.
Excluding the impact of revenue deferrals and restructuring
charges, adjusted earnings rose to 78 cents from 70 cents a year
earlier.
Revenue fell 10% to $23.8 billion, or $25.69 billion on an
adjusted basis.
Analysts polled by Thomson Reuters had expected adjusted
per-share profit of 71 cents and revenue of $25.26 billion.
Revenue in Microsoft's productivity and business processes unit,
which includes Office commercial products, rose 5% on a
constant-currency basis. Microsoft cited higher Office 365 and
dynamics revenues.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
January 28, 2016 16:45 ET (21:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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