© Reuters. File Photo: The Microsoft logo is seen November 7, 2017 in Los Angeles, California, USA. REUTERS/Lucy Nicholson
(Reuters) – Microsoft Corp reported better-than-expected quarterly profit on Tuesday. The strong performance of the company’s cloud services business offset a slump in the personal computer market, sending the stock up 4% in long trading.
Strong results for Microsoft (NASDAQ:), whose business spans cloud services, software, games and computer hardware, fuel fears of a tech industry meltdown that laid off thousands of workers this year in anticipation of a recession will relieve
According to Microsoft, revenue for its Azure cloud products in the second quarter increased 31%, in line with estimates compiled by Visible Alpha. Meanwhile, the broader Intelligent Cloud division had revenue of $21.5 billion. In comparison, the Wall Street consensus compiled by Refinitiv is $21.4 billion.
Azure is also steadily gaining market share from leader Amazon.com Inc (NASDAQ:)’s Amazon Web Services (AWS).
BofA Global Research estimates that Azure will end 2022 with a 30% share of the cloud computing market, up from 20% in 2018. AWS dropped from 71% to 55% over the same period.
Revenue from Microsoft’s More Personal Computing segment, which includes Windows, devices and search revenue, fell 19% to $14.2 billion as the PC market continued to shrink.
According to Refinitiv IBES, Microsoft’s revenue rose 2% to $52.7 billion in the three months ended Dec. 31, compared to the average analyst estimate of $52.94 billion.
On an adjusted basis, Microsoft earned $2.32 per share, versus the expected $2.29.