Strong cloud demand helps Microsoft offset PC market weak point

Strong demand for Microsoft’s cloud computing companies helped the US software program firm stand up to the results of a weakening economic system and a hunch within the PC market within the third quarter, in response to figures launched Tuesday.

The resilient efficiency lifted Microsoft’s income 11 per cent within the three months to the tip of September, to $50.1bn, barely forward of Wall Road expectations. The corporate’s shares slipped greater than 2 per cent on the information, even though its earnings per share of $2.35 have been 4 cents forward of expectations.

Income from Microsoft’s Azure cloud computing platform grew 42 per cent within the newest quarter, after stripping out the results of the stronger greenback. That was decrease than the 46 per cent recorded within the previous quarter and the 43 per cent that analysts had been anticipating. Nevertheless, it nonetheless largely confirmed Wall Road’s hopes that Microsoft’s cloud enterprise would make up for a pointy fall-off within the PC market this yr.

In keeping with Gartner, PC shipments fell 19.5 per cent within the third quarter, the most important decline because the analysis agency started monitoring the PC market within the mid-Nineteen Nineties. Income from Microsoft’s Extra Private Computing division, which incorporates Home windows PC software program, rose 3 per cent in fixed currencies, to $13.3bn.

In contrast, income from the Clever Cloud division, which incorporates Azure, rose 26 per cent to $20.3bn, after stripping out the results of forex actions. Income on the Productiveness and Enterprise Processes division, which incorporates Workplace, elevated 15 per cent, to $16.5bn.

The large leap within the US greenback depressed income by $2.3bn within the newest quarter, Microsoft mentioned. The most recent outcomes have been buoyed by a worth improve earlier this yr for its Workplace 365 suite of productiveness instruments, in addition to the completion of its acquisition of Nuance, which had gross sales of practically $350mn in the identical interval final yr.