Microsoft on Thursday reported quarterly profit of $8.9 billion, boosted in part by its efforts to rival Amazon as a key cloud computing provider for retailers and other businesses.
The Redmond, Washington-based company said it had net income of $1.14 per share in the fiscal fourth quarter, which ended June 30. Earnings, adjusted for non-recurring gains, were $1.13 per share.
The results topped Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.07 per share.
The increase in net income was 10 per cent. The software maker also surpassed forecasts by posting revenue of $30.1 billion in the period, a 17 per cent increase over the same time last year. Eleven analysts surveyed by Zacks expected $29.2 billion.
The company’s fastest-growing segment was what it calls the “intelligent cloud,” which includes server products and its Azure cloud computing platform. The segment’s revenue was $9.6 billion, up 23 per cent from a year ago.
Microsoft is being aided by the “threat of Amazon” as retailers look for a cloud computing partner they’re not also competing within e-commerce, said Alex Zukin, an analyst at Piper Jaffray. Microsoft last week announced a five-year cloud computing partnership with Walmart that accelerates an existing relationship between the firms.
“It’s a convenience thing,” Zukin said. “Walmart is looking for an innovation partner to compete on the same playing field as Amazon.”
Microsoft also reported a 25 per cent growth in revenue from its Surface line of laptops. That comes as the company is preparing to launch a more portable tablet called the Surface Go.
Microsoft shares have climbed 22 per cent since the beginning of the year, while the Standard & Poor’s 500 index has increased roughly 5 per cent. After the earnings release, shares increased less than 1 per cent to $105.12 in extended trading.
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