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If you're looking for bad news about Microsoft, top tip: look away now

Satya's on several cloud nines – as in, billions of dollars

Microsoft's boss Satya Nadella march into the cloud seems to be paying off for the Windows 10 and Office 365 giant: on Thursday, the biz announced its sales for Q3 2018 jumped 16 per cent.

For the quarter ending March 31, the third of Redmond's 2018 fiscal year, can be summarized thus:

  • Revenues of $26.8bn were up 16 per cent from $23.1bn in Q3 2017. This includes $9.92bn, up 13 per cent, year on year, from personal computing stuff: Windows, Surface and similar hardware, gaming, and search ads.
  • Net income was $7.42bn, a 35 per cent increase from $5.49bn a year ago.
  • Earnings per share of $0.95 were up 36 per cent from the year-ago quarter and ahead of the $0.85 estimate given by analysts.
  • Commercial cloud, a group that includes Office 365, Azure, and Dynamics 365 made $6bn in revenues, up 58 per cent from $3.8bn in the year-ago quarter. Azure alone grew revenues by 93 per cent, which is a little down from the 98 per cent figure in the previous quarter.
  • LinkedIn revenues of $1.33bn were up 37 per cent from $976m last year.
  • Gaming revenues of $2.25bn grew from $1.9bn last year.
  • Even Surface seemed to do well, with revenues up 32 per cent.

"With consistent investment and strong sales execution, this quarter we achieved better than expected performance across all segments,” declared chief bean counter Amy Hood.

"We delivered double-digit revenue and operating income growth driven by 58 per cent growth in our commercial cloud revenue.”

The soaring Azure et al revenues will be welcome news to Nadella, who has pushed a move into cloud since taking over for Steve Ballmer, who decided to transition from volatile CEO to volatile sports owner. Nadella's cloud-centric campaign has included a major re-org of Microsoft's business units to focus on cloud services.

"We took significant steps this quarter to put (cloud) at the forefront of everything we do," Nadella told analysts on a conference call.

Investors were happy with the numbers as well as Redmond's strong guidance to the end of the year. In after-hours trading, Microsoft shares were trading at $96, up 1.75 per cent. ®

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