Microsoft reported a net income of $11.6 billion in the first six months this year, easily beating Wall Street's expectations and pushing its stock up 3 percent during extended sessions, Wednesday.
Sales from its Office software suite are up, and so do profits from its Windows licenses just as support for the software comes to an end. Gaming revenue has plunged 21 percent, and the company is blaming some of that on an aggressive quarter of a third-party game in 2019.
Sales of the company soared 15 percent from the prior year to nearly $37 billion in the quarter. The continued growth momentum helped Microsoft's solid performance in its Cloud business.
In a press statement, Microsoft chief executive officer Satya Nadella said the company is innovating across every sector of its "differentiated technology stack" and leading in major areas that are crucial to Microsoft's clients' success.
Heather Bellini, an analyst at Goldman Sachs, stated Wednesday that the tech giant's Azure Cloud Computing business has been rising faster than the wider Cloud market. The division's quarterly sales were up 63 percent from the same period in 2019.
Analysts surveyed by FactSet projected the company to gain $1.32 a share on $35.7 billion sales for the October-December period. They expected a $1.24 in earnings per share on of $34.1 billion profit for the January-March period.
Boosting the Cloud business, and going up against industry giant Amazon Web Services, has been a big priority for Microsoft. Its Azure revenues have been moderately down in recent quarters, although not so significantly compared to Amazon's.
However, Andrew MacMillen, an analyst at Nucleus Research, noted that the trend is not worrying as the Cloud marketplace emerges to be more highly accessed. The sector is now reaching a "saturation point," MacMillen emphasized.
The Redmond, Washington-based multinational firm is planning to unveil its new Surface Earbuds in the spring, and it will likely roll out new Surface Book and Surface Go models this year, alongside the company's plans to introduce the new dual-monitor Surface Duo and Surface Neo gadgets.
Microsoft chief financial officer Amy Hood, during an earnings call with stakeholders, disclosed Microsoft estimates Surface sales growth in the "low single digits" as the company works through the challenges in the consumer landscape.
Microsoft's moves to overtake No. 1 Cloud provider Amazon got a big boost in October when the US Defense Department granted Microsoft a $10 billion deal to supply the US military with Cloud technology for the next 10 years.
