Published: Thu, April 25, 2019
Markets | By Otis Pena

Microsoft's commercial cloud revenue hits $38.4 billion run rate in Q3

Microsoft's commercial cloud revenue hits $38.4 billion run rate in Q3

Microsoft Corp beat Wall Street estimates for quarterly profit and revenue on Wednesday, powered by a surprise boost in Windows revenue and as growth in its cloud business stayed on track.

Microsoft shares have gained 23 percent this year, topping the 17 percent increase in the S&P 500 Index.

The company's shares rose about 4% in extended trading on the results, after closing at $125.01 in NY.

Under Chief Executive Satya Nadella, the company has spent the past five years shifting from reliance on its once-dominant Windows operating system to selling cloud-based services. Azure growth is decelerating a bit.

Microsoft touching the trillion-dollar mark would make it only the third publicly-listed company to do so, following Apple and Amazon which have both fallen below the threshold.

Worldwide public-cloud services sales are expected to grow 17.5 percent this year to $214.3 billion, according to Gartner Inc.

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Microsoft's shares rose on Wednesday after the company posted its financial results for the third quarter of 2019. Net income was $8.8-billion, or $1.14/share, compared with an average analyst estimate of $1/share, according to data compiled by Bloomberg.

Earnings per share were up 20 percent over the quarter a year ago, while revenue beat last year's second quarter number by 14.1 percent.

"Leading organizations of every size in every industry trust the Microsoft cloud".

For the quarter that ended March, the Redmond, Wash. -based tech giant is expected to earn $1.00 per share on revenue of $29.84 billion.

Even Personal Computing fared slightly higher at $10.7bn, an increase of eight per cent. This is because while the 76% revenue was impressive in number terms, the growth rate was flat from the first quarter. There's no one standout in the division but, rather, strong growth across the entire division; commercial Office products and service revenue was up 12 percent, consumer revenue up 8 percent, Dynamics revenue up 13 percent, with Dynamics 365 revenue growing by 43 percent, and LinkedIn revenue was up 27 percent.

Microsoft is also noting that its gaming revenue saw 5% growth occurring during a time when there were few exclusives offered for the console and ahead of any relevant Xbox news.

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