The results also included a net charge of $13.8 billion related to the Tax Cuts and Jobs Act.
Microsoft Corporation (NASDAQ:MSFT) reported on its second quarter of fiscal 2018 on Wednesday, posting encouraging results. Those results included 98-percent revenue growth in Azure and 5-percent revenue growth in enterprise services.
Office 365 saw 12 per cent and a 10 per cent bumps in for consumer and commercial use, respectively, while an 18 per cent year-on-year per hike in server and cloud services is better still.
"Office is continuing on its merry way, moving customers to Office 365", said Mark Moerdler, an analyst at Sanford C Bernstein & Co.
Excluding the charge, second quarter profit was $0.96, compared to an average analyst projection of $0.86.
On the other hand, the dynamic products and cloud services revenue increased 10%, which was driven by revenue growth of 67% in Dynamics 365.
Stock of the world's largest software company, which has risen nearly 50 percent over the past 12 months, initially fell in after-hours trading, but later moved into positive territory. Microsoft has been more focused on hardware lately, introducing touchscreen laptops and desktops that deeply integrate the Windows platform, but the unit containing hardware grew the slowest for Microsoft.
The Redmond, Washington-based company has rolled out services that add artificial intelligence conversations and language understanding into its cloud programs. Non-Pro revenue declined by 5% (5% CC), and Windows commercial products and cloud services declined by 4% (5% CC).
And Canaccord Genuity analyst Richard Davis made the case the company could hit a trillion dollars in market cap come 2020 from its current $715.5 billion. Overall, Microsoft (MSFT) reported better-than-expected earnings (http://www.marketwatch.com/story/shares-of-microsoft-slide-as-software-giant-reports-a-quarterly-loss-on-tax-cuts-2018-01-31) for its fiscal second quarter, even as the company reported a net loss because of a whopping $13.8 billion charge associated with changes in the USA tax code. "Strong execution from our sales teams and partners is driving growth across our businesses".
Earlier in the call CFO Hood had praised Microsoft's channel partners for helping Microsoft deliver "outstanding commercial results" around these key areas, despite the vendor still adjusting to the "sales reorganisation" it embarked on previous year.
When asked if Microsoft was falling behind in gaming, Nadella said Microsoft sees games as an opportunity beyond the console - especially with gaming cloud and entertainment services on the PC.
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