Microsoft shares initially jumped more than 8% after announcing results, but gave up some of the gains and were trading up about 4% at around $54.20.
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Microsoft generates more than half of its revenue from outside the United States, so is susceptible to big shifts in exchange rates. The company still trails market leader Amazon Web Service, but beats AWS in terms of growth. During the quarter Microsoft said it returned $6.5 billion to investors via share repurchases and dividends.
Microsoft started off its 2016 fiscal year by implementing a change to its financial reporting structure.
Revenue in the business that includes Windows fell 5 per cent to $12.66 billion.
On Thursday, the company said its revenue and profit fell in the last quarter, however, this doesn’t make much of a difference as it made more from cloud computing with the stocks increasing by more than five percent after the release of the numbers. On a non-adjusted basis, Microsoft reported earnings per share of $0.62 and revenues of $23.79 billion.
Wall Street analysts had been predicting that Microsoft would report earnings of around 71c per share; in the event, the company reported 78c. Sales to Windows computer OEMS declined by 5%.
CEO Satya Nadella said business testing of Windows 10 should help the operating system to be running soon on 200 million devices. In its prior guidance, Microsoft estimated around $6.2 billion to 6.3 billion revenue.
The Surface division was one of the highlights of Microsoft’s most recent quarter. Phone revenues declined almost 50% from the same quarter a year ago.
Azure revenue grew 140 percent with revenue from Azure premium services growing almost 3x. Subscriptions for Office 365 productivity software also lured both businesses and consumers, and even Windows sales came in better than the overall PC market, fueled by the adoption of Windows 10.
In terms of devices, Surface sales increased strongly, with revenues up by 29 per cent following the launch of the Surface Pro 4 and Surface Book.
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According to thebroadband, Microsoft has told analysts to expect a similar drop in revenue in the coming quarter.
