Microsoft shares rallied after the tech colossus reported that quarterly profit was down but still better than Wall Street expected. Microsoft made a profit of $5 billion on $23.8 billion in revenue in the final three months of last year, it said, propelling the company's shares about seven per cent when the earnings figures hit, before giving up some of the ground.
Shares were up more than three per cent to $53.64 in after-market trade, with analysts rejecting the notion that Microsoft was somehow past its sell-by date.
“It was a strong holiday season for Microsoft highlighted by Surface and Xbox,” said chief operating officer Kevin Turner, referring to the company's tablet computer family and gaming console. “Our commercial business executed well as our sales teams and partners helped customers realise the value of Microsoft's cloud technologies.” NPD Group analyst Stephen Baker told AFP that “People who think Microsoft is sliding into irrelevancy really need to re-evaluate how they see the company. They are a software-first company in a world that is increasingly about software.” The analyst credited Microsoft with having a ‘nice mix’ of businesses and reasoned that while consumer products get a lot of attention, legions of people use productivity software or services on the job and off.
Software offered as a service in the Internet cloud has been a key aspect of the technology veteran's effort to adapt to a shift away from packaged software on which the US company was built. Revenue from Microsoft Azure, which challenges cloud king Amazon Web Services, more than doubled while its overall ‘Intelligent Cloud’ unit grew five per cent to $6.3 billion, according to the earnings report.