Retooled Microsoft gets earnings boost

Agence France-Presse
Microsoft CEO Satya Nadella: 'We are making strong progress across each of our 3 ambitions by delivering innovation people love'

NADELLA. In this photograph taken on July 16, 2014, Microsoft CEO Satya Nadella speaks during his keynote address at the Microsoft Worldwide Partner Conference 2014 at the Verizon Center in Washington. Saul Loeb/AFP

SAN FRANCISCO, USA – Microsoft reported a modest rise in profits Thursday, October 22, in the past quarter, beating most analyst forecasts, saying its new focus on cloud-based software is delivering results.

The US tech giant said profit in the quarter ended September 30 edged up 2% to $4.6 billion, while revenue dipped 12% to $23.2 billion, hit by currency movements.

“We are making strong progress across each of our 3 ambitions by delivering innovation people love,” said chief executive Satya Nadella.

“Customer excitement for new devices, Windows 10, Office 365 and (cloud computing service) Azure is increasing as we bring together the best Microsoft experiences to empower people to achieve more.”

In after-hours trade, Microsoft shares jumped more than 6% to $51.08 on the stronger-than-expected results.

Barclays analyst Raimo Lenschow called it a “strong and clean quarter” for Microsoft, saying the company “exceeded consensus on most metrics.”

Revenue – although down – beat expectations and cost cutting had some success, Lenschow said in a note to clients.

Under Nadella, Microsoft has been shifting to offer more services through the Internet cloud to adapt to a new landscape in which mobile devices have become more important.

While Microsoft Windows remains the dominant PC operating system it has lost leadership to Google and Apple in mobile. 

Microsoft said that in the just-ended fiscal first quarter, “intelligent cloud” revenue grew 8% while personal computing revenue slipped 17%.

Revenue from its mobile phone operations slumped 54% from a year ago as it cut back on its handset business acquired from Nokia.

“We’re seeing great traction with businesses who want to bring Microsoft’s cloud, mobile device management technology and data analytics together to improve security and productivity,” said Kevin Turner, chief operating officer at Microsoft.

Microsoft earlier this month unveiled its first Windows 10 smartphones as it launched its first laptop, the Surface Book. 

The launch marks the latest step by Nadella to build on the July release of Windows 10, which is running on 110 million devices around the world. –