Microsoft reported third quarter earnings of $0.95 a share on revenues of $26.82 billion, beating Wall Street's estimates by $0.10 a share and $1.05 billion, respectively. Guidance will come on the earnings call.
Revenue at Microsoft's productivity and business processes unit, which includes Office 365, rose 17 percent to $9 billion, topping analysts' average expectation of $8.73 billion, according to Thomson Reuters.
Azure, the company's unit supplying cloud-based computer processing and storage, grew by 93 percent compared with the same quarter a year ago. The CEO added that Microsoft returned Dollars 6.3 billion to shareholders in the form of dividends and share buybacks in Q3, an increase of 37 percent from the year before. Microsoft, as much as anything else, is a cloud computing company now and a service provider in its own right.
Microsoft is riding a wave of demand for its Azure cloud services, which let customers run and store applications in the company's data centers. "Productivity and Business" sells the Office productivity suite and other software programs while "More Intelligent Computing" includes Windows PC license revenue and the Xbox gaming franchise. Stifel analyst Brad Reback wrote a recent note indicating that the shuffle "sends a strong signal of the supporting, and not leading, role Windows will likely take in coming years and we like the continued emphasis on hybrid cloud and AI". Office consumer products and cloud services revenue advanced 12 percent, with Office 365 consumer subscribers rising to 30.6 million.More news: Bucks 104, Celtics 102
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Shares traded up about 0.3% at $94.50 in after-hours trading.
Microsoft's Office 365, an online-productivity service for businesses, is also expected to continue to propel growth at the old-guard tech titan.
The company reported $3.5 billion in capital expenditures, its highest level yet and up 66 percent year over year.