Microsoft Corp (NASDAQ:MSFT) saw its share gain in the pre-market on Thursday after first-quarter earnings delivered overnight on Wednesday topped estimates thanks to a boost from its cloud computing services.
The computing giant reported earnings of US$1.38 per share, up 21% in the prior year and above analyst predictions of US$1.25, while revenues came in 14% higher at US$33.06bn compared to estimates of US$32.2bn.
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Azure, Microsoft’s cloud computing service which is designed to build and manage apps through its data centres, grew 59% in the quarter, although this was slower than the 76% figure a year ago and also below previous company estimates of 64% growth for the period.
Microsoft has been shifting more towards cloud computing after its current chief executive, Satya Nadella, took the helm in 2014, with spending on the division rising 38% year-on-year to US$26.3bn in the second calendar quarter of this year.
Meanwhile, the company’s traditional core business, More Personal Computing, which covers its Windows operating system, its Surface tablets, search ads and gaming, came in at US$11.1bn, above expectations of US$10.9bn.
Looking ahead, Microsoft said it expected double-digit growth in both revenues and operating incomes for the full year.
“Overall, Microsoft continues to deliver impressive growth on multiple fronts, reinforcing our long-term thesis that through its technological strength and scale, it remains well-positioned to benefit from a number of pervasive secular trends – including the deployment of cloud and artificial intelligence”, said Tom Fitzgerald, manager of the Amity International Fund at EdenTree Investment Management.
In pre-market trading in New York on Thursday, Microsoft’s shares were 1.1% higher at US$138.7.
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