Microsoft stock was up more than 4 percent to nearly $82 in after-hours trading Oct. 26 after the company reported better-than-expected earnings for Q1 of its 2018 fiscal year, which ended Sept. 30.
Revenue was cited at $24.54 billion against $23.56 billion projected by Thomson Reuters analysts. Earnings per share was 84 cents versus an expected 72 cents, so it was a big win for the Seattle-based software giant.
With the report, Microsoft exceeded its self-imposed revenue goal of $20 billion (an actual $20.4 billion in annualized run rate) for its commercial cloud business.
The company's Productivity and Business Processes unit, which encompasses the Office business, its Dynamics customer relationship management service, and LinkedIn, recorded a year-over-year revenue gain of 28 percent to $8.2 billion. This includes the cloud-based Office 365 application suite and its set of Dynamics 365 apps for CRM (customer relationship management, up 69 percent) and ERP (enterprise resource planning).
Microsoft is making noise in the cloud-based business productivity markets currently dominated by Salesforce and SAP, but it is still far behind them in marketshare.
Revenues from Intelligent Cloud, the company's unit that includes its Azure cloud computing service, was up 14 percent from the year ago-period to $6.9 billion. Microsoft doesn't disclose Azure revenue.
Microsoft's More Personal Computing unit, which includes its Windows, Surface PC and Xbox businesses, was flat from the year-ago period, bringing in $9.4 billion. Surface revenue by itself was up 12 percent from a year ago, and the Xbox division was up 1 percent.