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Microsoft shares soar on better-than-expected result

NEW YORK, October 21, 2016

Software giant Microsoft delievered better-than-expected quarterly profits of  $4.7 billion for the three months to September, sending its shares to an all-time high.

The figure compares with $4.9 billion a year earlier. Revenue was $20.45 billion compared with $20.38 billion a year ago.

The company's focus on cloud computing helped it achieve better results than projected. Shares rose 6 per cent to $60.73 in after-hours trading, said a BBC report.

Chief executive Satya Nadella has focused on building Microsoft's expertise in cloud-based services amid slowing PC sales.

The previous high was $59.97 in December 1999, close to the peak of the dot-com boom, shortly before Steve Ballmer replaced Bill Gates as chief executive.

When Nadella succeeded Ballmer in 2014, Microsoft's shares were trading below $37, BBC said.

Investor confidence in Microsoft has been restored by focusing on mobile and cloud computing rather than its traditional hardware like its Windows operating system and its Office software.

"It's not just the Silicon Valley startups anymore; it is the core enterprise that is also becoming a digital company. And we are well-positioned to serve them," Nadella said.

Microsoft said its gross profit margin from its commercial cloud business was 49 percent, much lower than its traditional software business, but still attractive and growing quickly. Microsoft has shared gross profit margins for its cloud business on occasion before, but recently said it would do so more explicitly in its earnings statements.




Tags: Microsoft | Cloud |

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