MSFT Microsoft Corporation

By Aaron Tilley 

Microsoft Corp. posted higher quarterly earnings on record sales, driven by continued strong growth in its cloud-computing business.

The software giant Wednesday reported fiscal second-quarter earnings per share of $1.51, up from $1.08 for the same period last year. Analysts surveyed by FactSet had expected earnings per share of $1.32. Revenue rose 14% to $36.9 billion, beating analysts' expectations of $35.67 billion.

Microsoft has enjoyed a period of earnings growth under Chief Executive Satya Nadella, who has bolstered the company's cloud-computing business that enables customers to rent rather than buy data storage and processing. The company has become the No. 2 provider of cloud-computing services behind Amazon.com Inc.

"We are innovating across every layer of our differentiated technology stack and leading in key secular areas that are critical to our customers' success," said Mr. Nadella.

Microsoft's intelligent cloud unit, which includes its Azure cloud services, had sales of $11.87 billion, up 27% from the year-ago period, beating analysts' expectations of $11.4 billion, according to FactSet.

In October, Microsoft beat out Amazon to provide cloud-services to the Pentagon. The deal is valued at up to $10 billion over the next decade, the Pentagon has said. Amazon is protesting the decision to award the contract to Microsoft.

Azure sales increased 62% in the second quarter from a year ago. Year-over-year sales were up 59% in the first quarter.

Microsoft's shares, which have risen 63% over the past year, were up 1.9% in after-hours trading.

Write to Aaron Tilley at aaron.tilley@wsj.com

(END) Dow Jones Newswires

January 29, 2020 16:46 ET (21:46 GMT)

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