Microsoft Corp on Thursday reported revenue and profit above Wall Street expectations, as sales of its hardware and cloud-computing services helped to offset a decline in the company's core Windows business.
The tech giant's net profit for the fiscal quarter ending March 31 fell 12 percent to $4.985 billion on revenues which rose six percent to $21.7 billion.
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"The company beat across the board," said FBR Capital markets analyst Daniel Ives. "The Street will cheer these results as it appears Microsoft is back on the right track after a head-scratching performance last quarter."
Chief executive Satya Nadella, who took the reins a year ago to help lead Microsoft into a much-changed tech landscape, cited gains in Internet "cloud" services and other offerings for enterprise.
Microsoft said it sold 8.6 million Lumia handsets the name used for the Nokia phone division whose acquisition was completed last year. That produced $1.4 billion in revenue, with no comparable figure from a year earlier.
"Customers continue to choose Microsoft to transform their business and as a result we saw incredible growth across our cloud services this quarter," said Nadella.
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Sales of Windows to computer manufacturers to install on new PCs fell 19 percent in the quarter, reflecting a sharp dip from a year ago when Windows got a brief boost from consumers rushing to buy new machines after Microsoft stopped support for the 14-year-old XP operating system.
But revenues improved for its Office 365 service the online version of its software suite as well as for search advertising and its Xbox Live gaming service.