Microsoft profit, revenue beats Wall Street view; shares up




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(Reuters) – Microsoft Corp on Thursday reported revenue and profit above Wall Street expectations, as sales of its hardware and cloud-computing services helped to offset a decline in the company’s core Windows business.

Shares rose 3.1 percent to $44.70 in after-hours trading.

“The company beat across the board,” said FBR Capital markets analyst Daniel Ives. “The Street will cheer these as appears Microsoft is back on the right track after a head-scratching performance last quarter.”

Sales of Windows to computer manufacturers to install on new PCs fell 19 percent in the quarter, reflecting a sharp dip from a year ago when Windows got a brief boost from consumers rushing to buy new machines after Microsoft stopped for the 14-year-old XP operating system.

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decline was offset by higher revenue from its Surface tablet, back-end server software and cloud-related offerings such as its Office 365 suite of applications.

The company said its commercial cloud-related revenue for the quarter more than doubled, and was now running at $6.3 billion a year. Amazon.com Inc said on Thursday its quarterly cloud revenue rose almost 50 percent to $1.57 billion, suggesting a similar annual number.

Microsoft’s overall revenue rose 6 percent to $21.7 billion, above Wall Street’s average forecast of $21.1 billion, according to Thomson Reuters I/B/E/S.

Taking out the effects of the strong U.S. dollar on currency rates, Microsoft said revenue would have risen 9 percent.

Earnings per share declined to 61 cents per share from 68 cents in the year-ago quarter. Analysts had expected 51 cents, on average.