Microsoft gets a boost from the cloud, beats profit forecast

Microsoft easily beats the street as its cloud run rate passes $20B a year early

Microsoft edges above US$600 billion market cap

In the previous quarter, Microsoft said its run rate exceeded $18.9 billion and that Azure revenue growth was 97 percent.

Revenue from Azure was up 90 percent year over year, and commercial revenue for Office 365 subscriptions was up 42 percent. Bolstering these results were the rapid growth of Microsoft's cloud services.

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Many of them issued statements citing studies asserting that the rule would do more harm than good for consumers. On the flip side, allowing the rule to stand likely would have caused an explosion of class-action lawsuits.

Shares in the company, which reported its results after the closing bell on Thursday, inched up nearly 4% to about $81.75 in after-hours trading.

Microsoft managed to grow both revenue ($24.5 billion, up 12%) and profits ($6.6 billion, up 16%), showing the gains were not simply due to cutting.

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Cloud goal: Microsoft topped its goal of passing $20B in commercial cloud ARR this fiscal year. Microsoft says that's in part due to reduced patent licensing revenue, but it's also due to a $315 million drop in phone revenue, since Microsoft doesn't actually make phones any more. Microsoft doesn't disclose the actual dollar amount of Azure revenue. The overall market has continued to contract, and Microsoft's Surface devices fluctuate in popularity based on competition and when new devices hit store shelves.

Total revenue in the company's More Personal Computing division, which also includes the Windows operating system, was $9.4 billion, beating the $8.8 billion average estimate of four analysts polled by Bloomberg. This recent period was the first full quarter in which stores were stocked with an update to that product - Microsoft's best-selling Surface - and a totally new category, a laptop computer with a clamshell design. Industrywide, global PC shipments fell 3.6 percent in the period, according to Gartner Inc. In 2015, a year after being named the company's CEO, Satya Nadella said he wanted Microsoft to hit that target sometime in 2018 - a big jump up from the $6.3 billion business it was back then.

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Productivity and Business Processes: This segment, which includes results from Office and Office 365 (commercial and consumer customers), grew 28 percent to $8.2 billion.

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