Cloud growth helps Microsoft beat Wall Street expectations

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FILE – This April 12, 2016 file photo shows the Microsoft logo in Issy-les-Moulineaux, outside Paris, France. Microsoft took five hours to resolve a major outage of its workplace applications on Monday, but has not clarified what caused the outage. The company said the outage, which affected users’ ability to log into Office 365 applications, began early evening Monday Eastern time. Microsoft did not reply to questions Tuesday, Sept. 29, 2020 about what caused the outage, but said on its service-status Twitter account that it had identified a “recent change” that caused problems. (AP Photo/Michel Euler, File)

REDMOND, Wash. (AP) — Microsoft reported quarterly earnings Tuesday that beat Wall Street expectations, as it continued to weather the coronavirus pandemic amid increased demand for its flagship software and services.

The company reported fiscal first-quarter profit of $13.9 billion, or $1.82 per share, beating Wall Street expectations of $1.54 a share. Microsoft posted revenue of $37.2 billion in the July-September period, up 12% from last year. Analysts had been looking for revenue of $35.8 billion, according to FactSet.

The software giant has benefited from a COVID-19-fueled trend of working and learning from home that boosted demand for its cloud computing services and workplace productivity products, such as email and video conferencing. It’s also experienced heightened demand for its Xbox gaming system.

The company’s growth was led by its commercial cloud segment, which grew 31% from the previous year to generate $15.2 billion in revenue, said Amy Hood, Microsoft’s chief financial officer.

Revenue from the company’s Xbox content and services grew 30% as the company next month prepares to launch its first new console since 2013. Preorders began in September.

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