In this July 11, 2019 photo, a Microsoft store is shown in Aventura, Fla. Microsoft Corp. reports earnings Thursday, July 18, 2019. (AP Photo/Wilfredo Lee)

Microsoft cloud growth beats expectations

July 18, 2019 - 5:35 pm

REDMOND, Wash. (AP) — Microsoft on Thursday reported quarterly profit of $13.2 billion, powered in large part by a steadily growing cloud computing business that the company says now accounts for 30% of its total revenue.

The Redmond, Washington-based company said it had net income of $1.71 per share in the fiscal fourth quarter, which ended June 30. Earnings, adjusted for non-recurring gains, were $1.37 per share.

The results exceeded Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.21 per share.

The increase in net income was 49% but was affected by a one-time tax benefit from transferring some properties from foreign subsidiaries to the U.S. and Ireland. The software maker also surpassed forecasts by posting revenue of $33.7 billion in the period, a 12% increase over the same time last year. Eleven analysts surveyed by Zacks expected $32.7 billion.

The company's fastest-growing segment was what it calls the "intelligent cloud," which includes server products and its Azure cloud computing platform. The segment's revenue was $11.4 billion, up 19% from a year ago.

CEO Satya Nadella said Thursday "it was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry."

In its latest corporate deal, the company announced Wednesday that it's partnering with AT&T to migrate some of AT&T's "non-network infrastructure" onto Microsoft's cloud platform.

Microsoft shares have climbed 34% since the beginning of the year, while the Standard & Poor's 500 index has climbed 19%. In the final minutes of trading on Thursday, shares hit $135.83, an increase of 29% in the last 12 months.

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Parts of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MSFT at https://www.zacks.com/ap/MSFT

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