Microsoft earnings rise on its growing cloud business

Microsoft's cloud push continued to pay off last quarter, with revenue from its Azure services more than doubling from the same period a year ago, the company reported Tuesday. Investors want to know Microsoft's plans for the networking site.

The new and growing cloud business - essentially selling computing services and storage in its data centers to corporate customers - is one of the priorities for Chief Executive Satya Nadella, who took the helm of the world's largest software company in early 2014.

Microsoft spent in the quarter $3.1 billion in capital expenditures-an accelerating investment meant to add cloud capacity for near- and long-term customer demand.

Microsoft closed out its fiscal year on June 30, with $92 billion in revenue (non-GAAP) and $22.3 billion in net income.

In the Q4 Microsoft earnings report, revenue from Office 365, a subscription version of the old Office software was up 54 percent by catering to commercial customers.

Microsoft's Chief Financial Officer, Amy Hood, said the company spent the past year investing in innovation and expanding its market presence in product areas and geographically.

More Personal Computing division sales, which include Windows and Xbox, fell 3.7 percent to $8.9 billion, slightly better than the $8.87 billion average analyst estimate. Gartner revealed in May that Windows Phone accounted for just 0.7 per cent of global smartphone sales, and more recent figures show that Microsoft's hold on the United Kingdom mobile market has halved over the past 12 months.

The company also said in June that it will launch the first major update to Windows 10 on August 2 which will reinforce security, improve the Cortana digital assistant, Windows Ink pencil tool and Microsoft Edge browser.

In a rare concession, Microsoft signaled last week that it was backing off its stated goal of getting Windows 10 on a billion devices by 2018. However, the failure in mobile does not prevent software giant from thriving in other highly lucrative domains.

The robust result was driven by strong growth in Microsoft Cloud business. The section together clocked just $8.9 billion in revenue as compared to $12.7 billion in the last quarter.

After Microsoft reported its earnings results, shares climbed during the afterhours trading moving up 4.2 percent to $55.34.

The earnings for Microsoft had $22.6 billion of non-GAAP revenue and $20.6 billion of GAAP revenue with a per-share non-GAAP profit of 69 cents per share and 39 cents per share for GAAP.

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