Published: Sat, October 27, 2018
Electronics | By Kelly Massey

Microsoft profits jump despite cloud growth slowdown

Microsoft profits jump despite cloud growth slowdown

Xbox software and services earnings increased by around 36%.

The company, which reported after markets closed, said it earned $1.14 per share on revenue of $29.08 billion for its fiscal first quarter on Wednesday, compared with 84 cents per share and $24.54 billion in the same quarter a year ago.

The software giant has now beaten analysts' revenue estimates 20 of its last 21 quarters.

Mark Sami, vice president at consultancy firm SPR, said Microsoft's "mature hybrid cloud offering" helps to fuel growth and leaves rivals like Amazon "playing catch up".

HEXUS readers are likely most interested in Microsoft's More Personal Computing segment, which includes Windows, Surface, and Gaming.

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Microsoft's profits have risen by more than a third despite growth in its crucial cloud computing business slowing down. That figure beat the consensus analyst estimate of $10.13 billion.

Analysts were expecting revenue of $27.9 billion on earnings of $7.5 billion and earnings per share of 96 cents.

Money taken in by a productivity and business processes unit rose to $9.8 billion, including strong growth in cloud-based Office productivity products aimed at consumers and companies, according to Microsoft.

Lastly, Microsoft's red-headed stepchild, Windows, was also superstar during this earnings period as its OEM Pro revenue grew a modest 8% in an overall industry stagnating quarter. For Q1, Microsoft's gaming division saw a revenue bump of 44% and a total of 57 million users who have signed up for the company's digital subscription service, Xbox Live.

Microsoft's shares were up 3.4 percent to $105.84 in after-hours trading Wednesday, after slipping 5.4 percent in the regular trading session amid a broad sharp market decline.

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