By Yasin Ebrahim
Investing.com - Microsoft (NASDAQ:MSFT) on Wednesday reported earnings and revenue that beat consensus estimates as slowing growth in its cloud business was not as bad as many had feared.
Microsoft shares gained 2.10% in after-hours trade following the report.
Microsoft announced earnings per share of $1.40 on revenue of $35.02 billion. Analysts polled by Investing.com anticipated EPS of $1.29 on revenue of $33.99 billion. That compared with an EPS of $1.14 on revenue of $30.57 billion in the same period a year before. Microsoft had reported EPS of $1.51 on revenue of $36.91 billion in the previous quarter.
Revenue in productivity and business processes was up 15% to $11.7 billion and its intelligent cloud business, which includes Azure, grew revenue 27% to $12.3 billion.
The company said the Azure business growth was 59% in the quarter, down from a growth rate of 64% in the fourth quarter of last year.
"In this dynamic environment, our sales teams and partners executed a solid third quarter, with commercial cloud revenue generating $13.3 billion, up 39% year over year," said Amy Hood, executive vice president and chief financial officer of Microsoft.
Revenue in more personal computing was up 3% to $11 billion. In February, the company warned that it did expect to meet the $10.75 billion to 11.15 billion revenue guidance for its more personal computing segment owing to the pandemic-related impact on Windows and Surface devices.
"Microsoft is one of the major beneficiaries of the current 'shelter in place' environment. Its core Office products are benefiting from the increased demand for connectivity as people work and interact socially from home," Investing.com analyst Harris Anwar said. "The other big reason that makes Microsoft a standout in this grim economic environment is that businesses and governments are continuing to invest in their transition to cloud computing—which has been the company's key growth area in recent years."
Analysts are expecting EPS of $1.40 and revenue of $36.76 billion in the upcoming quarter.
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