Microsoft beats second-quarter revenue estimates on cloud growth

FILE PHOTO: Microsoft CEO Satya Nadella addresses a news conference in Berlin, Germany February 27, 2019. REUTERS/Fabrizio Bensch

(Reuters) – Microsoft Corp (MSFT.O) beat analysts’ estimates for quarterly revenue on Wednesday, driven by strength in its cloud computing platform Azure, sending its shares up 2%.

Revenue in the company’s intelligent cloud segment, which includes Azure, rose 27% to $11.9 billion in the quarter, beating analysts’ average estimate of $11.40 billion.

Microsoft faces intense competition from Inc’s (AMZN.O) AWS for share in the cloud infrastructure market, as more companies look to shift their computing work to data centers managed by cloud providers.

Amazon Web Services dominates the market with 32.6% share followed by Azure that holds about 17% share, according to data from research firm Canalys.

Azure, which has been reporting slowing growth since last year, posted quarter-over-quarter growth of 62% in the second quarter versus 59% in the first quarter.

Revenue from its personal computing division, its largest by sales, rose 2% to $13.2 billion, beating analysts’ expectations of $12.84 billion. The unit includes Windows software, Xbox gaming consoles, online search advertising and Surface personal computers. The tech giant’s total revenue rose 13.7% to $36.91 billion in the quarter ended Dec. 31, beating analysts’ estimates of $35.68 billion, according to IBES data from Refinitiv.

Net income rose to $11.65 billion, or $1.51 per share, from $8.42 billion, or $1.08 per share, a year earlier. (

Analysts on average had expected a profit of $1.32 per share.

Reporting by Ayanti Bera in Bengaluru and Stephen Nellis in San Francisco; Editing by Maju Samuel

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