Microsoft Q3 Profits Beat Estimates

Beating analysts’ estimates, Microsoft on Thursday said profit during its fiscal third quarter was 62 cents a share -- excluding costs related to restructuring and integration related to its acquisition of the Nokia Devices and Services business.

Revenue during the period ending March 31 came to $21.7 billion -- better than the $20.4 billion Microsoft took in this period a year ago.

Microsoft CEO Satya Nadella attributed the strong showing to cloud software sales and premium server programs.

"We saw incredible growth across our cloud services this quarter," Nadella said on Thursday.

Commercial cloud revenue grew 106% -- up 111% in constant currency -- driven by Office 365, Azure and Dynamics CRM Online. The division is now on an annualized revenue run rate of $6.3 billion, Microsoft reported on Thursday.

During the period, devices and consumer revenue grew 8% -- up 11% in constant currency -- to $9 billion.

Search advertising revenue grew 21% -- up 24% in constant currency -- with Bing U.S. market share up 150 basis points year-over-year to 20.1%



During the quarter, Microsoft and Yahoo amended their search partnership, and reaffirmed the commitment they made back in 2009. The pair made changes to the partnership to keep it "productive," in their words.

Worldwide, eMarketer recently estimated that the combined network would account for 6.5% of the $81 billion going to search advertising this year.

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