Microsoft's profit rises 3.6 percent as cloud demand soars | Reuters

 Microsofts profit rises 3.6 percent as cloud demand soars
| Reuters

Microsoft Corp (MSFT.O) reported a 3.6 percent rise in quarterly profit on Thursday, powered by a surge in demand for the company's flagship cloud platform Azure.The company's shares were marginally higher at $64.34 in after-hours trading.Since taking charge in 2014, Chief Executive Satya Nadella has steered the company toward cloud services and mobile applications away from its slowing traditional software business.The company's "Intelligent Cloud" business, which includes Azure, rose 8 percent to $6.9 billion in the second quarter. That beat analysts' average estimate of $6.73 billion, according to research firm FactSet StreetAccount.Revenue from Azure, which businesses can use to host their websites, apps or data, jumped 93 percent in the quarter. Sales had more than doubled in the preceding quarter.The Azure platform competes with offerings from companies including (AMZN.O), Alphabet Inc's Google (GOOGL.O), IBM Corp (IBM.N) and Oracle Corp (ORCL.N).

Microsoft does not give an absolute revenue figure for Azure. Amazon's AWS, Azure's biggest competitor, grew revenues 55 percent to $3.23 billion in its most recent quarter.Sales in Microsoft's personal computing business, which includes its Windows software, fell 5 percent to $11.8 billion. Worldwide PC shipments, which have been in decline since 2012, fell 5.7 in 2016 from a year earlier, according to research firm IDC. However, the market is showing signs of stabilization.

Nadella also orchestrated Microsoft's biggest acquisition, the $26.2 billion deal for LinkedIn. The transaction closed last month.LinkedIn contributed $228 million of revenue in the second quarter, Microsoft said. LinkedIn also reported a net loss of $100 million, or 1 cent per share, in the quarter.Excluding items, Microsoft earned 83 cents per share.

The company's net income rose to $5.20 billion, or 66 cents per share, in the second quarter ended Dec. 31, from $5.02 billion, or 62 cents per share, a year earlier. ( revenue rose to $26.07 billion from $25.51 billion.Microsoft's shares had risen 23.2 percent in the past twelve months, compared with the 20.7 percent gain in the broader S&P 500 index. .SPX (Reporting by Narottam Medhora in Bengaluru; Editing by Sriraj Kalluvila)

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Updated Date: Jan 27, 2017 04:00:08 IST