Microsoft jumps after earnings beat

Microsoft ended 2016 on a high note by capping off the final three months of the year (which is Microsoft’s second fiscal quarter of 2017) with revenue of $26.1 billion, net income of $6.5 billion, and earnings per share of $0.83.

Revenue from the company’s “intelligent cloud” unit reached $6.9 billion, up 8% for the quarter. Since it is guaranteed that Microsoft will be able to recognize these revenues in the future, it makes sense for Microsoft to include the deferred Windows 10 revenues in their adjusted (thus non-GAAP) results in order to better reflect how much the company’s sales are worth in a specific quarter.

Microsoft is up 1.8% at $65.40 a share on Friday morning after the company’s fourth-quarter results topped Wall Street’s expectations.

Chief Executive Officer Satya Nadella is reformulating the company as a seller of internet-based corporate services for running applications, storing data, collaborating and enhancing worker productivity. One of the biggest acquisitions of 2016 made the acquirer say that the company acquired was the reason for the growth in the revenues.

“A combination of continued strong cloud growth and stability on-premise business suggest Microsoft’s transition to cloud should remain on track”.

And Microsoft is looking to engage Office 365 users with new services, such as E5 – a new commercial licensing plan – as well as voice, analytics and security features, Nadella said. But while the cloud was Vole’s saviour it seems that Microsoft had to slash margins for its flagship cloud platform Azure by a percentage.

Windows 10 has also been ahead in the United Kingdom for some time now going by StatCounter’s figures, having a market share of 31.02% which is well ahead of Windows 7 on 21.49% as of the end of a year ago. “Commercial cloud annualized revenue run rate exceeds $14.0 billion”, crows the subhed on its release for its earnings for the three months ending December 31.

“We’re seeing great momentum in Google’s newer investment areas and ongoing strong progress in Other Bets”, she said.

However, Microsoft said this was offset by increased earnings from Xbox software and services such as the online Xbox Live multiplayer service. Personal computing revenue was $11.8 billion, down 5% with the decrease blamed on lower phone revenue.

Microsoft said their profits were augmented by 3.6% in the second financial quarter. Office 365 leverage is critical to Microsoft’s strategy, Nadella said.

By all accounts, Microsoft’s cloud sales are propelling the company forward.

Microsoft has its operations divided broadly into “Productivity and Business Processes”, “Intelligent Cloud” and “More Personal Computing”. In the year-ago quarter, the two had declined by 6% and 3%.