Cloud-based software drove Microsoft's profit growth, due to strong sales that beat analyst estimates for the eleventh consecutive quarter.
Profit excluding tax gains rose to $2.27 per share, compared to expectations of $2.07. Sales by department in the current period were also above expectations.
CEO Satya Nadella has cemented the company's success in the cloud by orchestrating a steady stream of Azure software deals, which store data and manage applications for businesses. Internet-based Office programs continue to grow as Microsoft successfully convinces customers to pay for advanced versions and extended contracts.
Sales of Azure and other cloud services increased 50% recently, just below the 51% rate in the previous quarter. Office 365 sales to business customers rose 23%, as demand for advanced features pushed more customers to higher-priced subscriptions.
Microsoft shares gained about 1.6% in extended trading yesterday, after rising to $310.11 in New York. The stock rose 4.1% in the first quarter of the fiscal year.
Last week, the software giant's shares hit an all-time high, reflecting investor optimism about growth prospects in Azure, Office, artificial intelligence and games. The company's market capitalization exceeds $2.3 trillion.
Microsoft said that in addition to tax benefits, net income in the first quarter rose to $20.5 billion, or $2.71 per share. The company has returned some intellectual property rights to the United States, which will result in a higher overall tax rate later.
