Its shares rose almost 3 percent in after-hours trading to $40.96,
keeping the stock at levels not seen since the turn-of-the-century
Internet stock boom.
Microsoft shares are up about 8 percent since company veteran Satya
Nadella took over as CEO in early February, and are up 19 percent
since his predecessor Steve Ballmer announced plans to retire last
August, easily outpacing the Standard & Poor's 500 <.SPX>.
Investors are excited about Nadella's focus on mobile and cloud, or
Internet-based, computing, designed to take Microsoft beyond its
traditional PC-based Windows business. Nadella is set to face
analysts' questions for the first time in public on a conference
call later on Thursday.
"This quarter is a nice step in the right direction for Nadella and
Microsoft," said Daniel Ives, an analyst at FBR Capital Markets. "We
would characterize these results as solid in a choppy IT spending
Nadella's emphasis on cloud computing helped its server software
business, while a softer-than-expected decline in PC sales limited
damage to the bottom line.
The Redmond, Washington-based company reported quarterly profit of
$5.66 billion, or 68 cents per share, compared with $6.05 billion or
72 cents in the year-ago quarter.
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The decline was exaggerated by deferred revenue boosting the
year-ago figure, and the latest quarter's profit beat Wall Street's
average estimate of 63 cents per share, according to Thomson Reuters
Sales fell 0.4 percent to $20.4 billion, meeting analysts'
Personal computer sales fell by as much as 4.4 percent in the
quarter, according to the two major technology research firms,
making the eighth straight quarter of declines as tablets and
smartphones gain in popularity.
That decline was likely muted by the end of Microsoft's support for
its decade-old Windows XP system in early April, which appears to
have prompted many people to buy a new computer.
(Editing by Cynthia Osterman and Matthew Lewis)
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