Microsoft (MSFT) Stock Soars in After-Hours Trading as Earnings Beat Estimates

Since Microsoft reports its Azure revenue within what it calls the Intelligent Cloud division, it’s unclear how much Azure, in particular, raked in; the cloud unit as a whole, however, brought in $6.3 billion, a 5% increase from a year ago.

The US software giant, which bought Nokia for £4.5 billion in 2014, saw sales of handsets plummet from 10.5 million in the final quarter of 2014, it revealed in its FY16 Q2 results. Windows 10 adoption continues to outstrip expectations, with roughly 200 million devices running the operating system.

The revenue Microsoft generated from their cloud business, including the Azure platform used by many businesses for storage and collaboration, was up by 5% to 6.3 billion dollars (£4.3bn), while Azure revenue alone was up by 140%.

“Our commercial business executed well as our sales teams and partners helped customers realize the value of Microsoft’s cloud technologies”.

The after Christmas slump has been particularly hard for technological companies, including, in part, Microsoft.

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

“We delivered double-digit operating income growth in non-GAAP constant currency while investing in key strategic areas that position Microsoft for continued long-term growth”, said Amy Hood, executive vice president and chief financial officer of Microsoft, in a statement. With its cloud business, Microsoft is hosting companies’ content, websites and apps on its own massive data centers.

Microsoft also benefited from the shift away from PCs to mobile computing devices, with Surface revenue up 29% in constant currency terms, driven by the launch of Surface Pro 4 and Surface Book. Overall revenues from smartphone sales fell by 53 percent compared to the same period past year.

When breaking down the figures between different Microsoft divisions and interesting and consistent image comes into focus.

The most significant decline was a fall in phone revenue of 49% in constant currency. The company pulled in revenue of $25.7 billion in constant currency, and $0.78 earnings per share.

Investors reacted positively to the news, with shares of Microsoft trading up almost 5 percent today.