Microsoft beats on high demand for cloud products

“One thing we’re noticing is that with anyone who moves to the cloud, there is a real opportunity for us to expand to multiple workloads over time”, said Nadella on the call.

Microsoft has released its earnings numbers for the second quarter of its fiscal 2016.

There’ll be cause for extra celebration, of course, if it turns out Microsoft ($MSFT) pulled off a stronger-than-expected quarter.

The Redmond, Wash-based software giant reported adjusted earnings per share of 78 cents against revenue of $25.7 billion, which surpassed S&P Capital IQ analyst consensus estimates of 71 cents earnings per share on $25.2 billion in revenue.

Microsoft’s stock price was up slightly as of mid-morning Thursday, to $51.48 a share at latest check.

That comes as Microsoft’s best-known business-software for personal computers-continued to weaken.

In the year-ago quarter, the company reported revenue of $26.5 billion and earnings of $0.71.

Since assuming the CEO role in February 2014, Microsoft CEO Satya Nadella has been pushing the company to adapt to a world where people are increasingly using mobile gadgets in addition to PCs, and where businesses are moving more of their operations online.

Shares were up more than three percent to $53.91 in after-market trade, with analysts rejecting the notion that the technology veteran was somehow past its sell-by date. That segment, which also includes its Xbox video game consoles and popular Surface Pro, posted a 2 per cent decline in revenue excluding currency impacts.

While the traditional Office business – the software suite that includes Word, Excel and PowerPoint – has been lackluster in recent quarters, the Office 365 cloud versions of those programs are growing in both consumer and corporate usage. That metric has now reached $US9.4 billion, Hood said after Thursday’s report.

However, revenue growth within the company’s More Personal Computing business declined by 5% to $12.7 billion for the quarter.

At this point, steady Office 365 growth is not much of a surprise. Revenue from server products grew 10 percent, for example, and Azure revenue grew 140 percent.

Microsoft’s aggressive campaign to promote Windows 10 has already led to its deployment on more than 200 million devices since its July release. Revenue from the company’s Surface tablet rose 29 per cent on a constant-currency basis, and sales in the Phone group fell 49 per cent, hit by Microsoft’s retreat from that business.