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Microsoft earnings top estimates amid cloud strength

Microsoft CEO Satya Nadella. Photo: Microsoft

As was the case with Intel, Microsoft reported earnings Thursday that topped Wall Street expectations even as the PC business remained flat.

The bottom line: Microsoft's strength continues to be its cloud computing area, with its business cloud generating $20 billion in annualized revenue, reaching that milestone ahead of a goal set two years ago.

The software giant reported per-share earnings of 84 cents, ahead of consensus estimates of around 72 cents, while revenue of came in at $24.5 billion, ahead of Zacks consensus projection of $23.5 billion

Here are some other highlights:

  • Microsoft's Office commercial products and cloud services revenue increased 10%, as revenue from its Office 365 service for businesses grew 42%.
  • Sales of Windows for new PCs were up 4%, ahead of the flat PC market.
  • Microsoft saw sales from its Surface PC line up 12 percent, while gaming revenue from its Xbox unit was largely flat.
  • LinkedIn accounted for about $1.1 billion of Microsoft's revenue.
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