Microsoft stock hit record highs ahead of Thursday’s first quarter 2018 earnings report, which blew away analyst estimates. Microsoft reported revenue of $24.5 million and 84 cents a share, compared to $22.33 billion and 76 cents a share in the same period the previous year.Like Amazon, Google and Intel, which also released earnings Thursday, its cloud services are hot.
Analysts had expected revenue of about $23.56 billion and earnings of 72 cents a share.
Microsoft’s intelligent cloud business hit revenues of $6.9 billion and its cloud rate topped $20 billion, outpacing the goal the company set two years ago of hitting $20 billion by the end of its 2018 fiscal year.
That was a bit of a surprise and much analysis of its earnings focused on its cloud business, which has also been a revenue generator for Amazon, Google and Intel, which also reported earnings Thursday. All posted stellar results from their cloud businesses, showing a shift away from company owned data centers to cloud computing.
Microsoft’s Azure revenue almost doubled and posted 90 percent year over year growth. Microsoft doesn’t break out its Azure numbers, but the Canalys research firm estimates it brought in $2 billion, acccording to Reuters.
“This quarter we exceeded $20 billion in commercial cloud ARR, outpacing the goal we set just over two years ago,” said Satya Nadella, chief executive officer at Microsoft. “Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform.”
The company’s productivity and business processes division, which includes the Office suite, LinkedIn and other items, had $1.1 billion in revenue, exactly the same as in the previous quarter. LinkedIn sessions were up 20 percent.
Microsoft’s Surface PC products had been seeing revenue decline, but grew 12 percent in this quarter due to the launch of new products.
The company’s search ad revenue, based in Bing, increased 15 percent. Xbox software and services revenue also rose, up 21 percent.
Microsoft (Nasdaq:MSFT) was up $3.70, 4.7 percent to $82.46 in pre-market trading Friday morning.