Bing, Surface Generate $2.3 Billion in Q2 For Microsoft

Amazon made $2.4bn (£1.7bn) from Amazon Web Services in its last quarter, so you’d think Microsoft is blowing Amazon out of the water with its $6.3bn earnings, but Microsoft isn’t actually so transparent when it comes to reporting on its cloud.

Microsoft Corporation (NASDAQ:MSFT) released the earnings results from the second quarter of its fiscal 201 after closing bell tonight, posting adjusted earnings of 78 cents per share, compared to the analyst estimate of 71 cents per share.

Microsoft shares were up about 8% to around $56 a share after announcing results.

By business unit, revenues were $6.7 billion for Productivity and Business Processes, $6.3 billion for Intelligent Cloud and $12.7 billion for More Personal Computing.

Surface’s revenue did dip last quarter, but this time it is up over 29% to $1.35 billion, thanks to the Surface Pro 4 and Surface Book.

Revenue for Windows phones fell 49% year-over-year.

The analyst credited Microsoft with having a “nice mix” of businesses and reasoned that while consumer products get a lot of attention, legions of people use productivity software or services on the job and off. Excluding the impact of currency headwinds, sales of Microsoft’s Azure cloud-computing program grew 140 percent from a year earlier. Same goes for Office 365, which falls under the umbrella productivity category that drew $6.7 billion in revenue (a 2% decrease).

Chief Executive Satya Nadella has focussed on cloud services and mobile applications on the basis that he will see slower growth in its traditional software business. That measure, which includes Azure plus other businesses such as Office 365, is up 15% from the $8.2bn revenue it estimated last quarter.

“The enterprise cloud opportunity is massive – larger than any market we’ve ever participated in”, Nadella said on a conference call to discuss the financial results.

“It was a strong holiday season for Microsoft, highlighted by Surface and Xbox”, Chief Operating Officer Kevin Turner said in a statement.

Microsoft reported a better-than-expected second quarter the company grew its cloud footprint and delivered solid gains in Office 365 subscriptions and Dynamics CRM Online seats.