Microsoft Inc. (MSFT - Get Report) shares fell 1.8% to close Thursday's trading at $104.43 after the computing giant posted solid December quarter revenues but noted slowing growth rates for its Azure cloud offering and the impact of a strong U.S. dollar on overseas sales.

Microsoft said non-GAAP earnings for the three months ending in December, the company's fiscal second quarter, came in at $1.10 per share, just ahead of the Street forecast, while revenues rose 12.3% to $32.47 billion, largely in-line with analysts estimates. Microsoft's intelligent cloud revenue rose 20% to $9.4 billion, the company said, but the pace for growth in Azure, its key product offering, stalled at 76% from the previous quarter while commercial bookings grew 22% from last year.

Looking ahead, Microsoft said it sees fiscal third quarter revenues for productivity and business, its biggest unit, in the range of $9.9 billion to $10.1 billion, up 12.2% from the same period last year at the higher end, while intelligent cloud sales should rise around 18% to $9.35 billion. Total revenue growth, however, is likely to take a two percentage point hit thanks to currency market headwinds owing to the strength of the U.S. dollar.

"We're seeing the breadth and depth of our cloud offering, which is what we are really architected to have real synergies in the context of what our customers want to achieve, and that's what we are seeing," CEO Satya Nadella told investors on a conference call late Wednesday. " "In fact, it's very healthy and we think that it'll continue to be healthy. And if anything, at our scale, as you can imagine, we are becoming much more efficient in how we use software to utilize the capacity we have."

The U.S. dollar index, which benchmarks the greenback against a basket of six major global currencies, rose 1.1% over the three months ending in December, but ended the year 3.8% higher than the fourth quarter of 2017.

Microsoft also reported a commercial cloud revenue run rate for the year, including LinkedIn enterprise sales, of $34 billion.

Azure has a market share of the cloud computing market of about 15%, according to market researcher Synergy, only trailing fellow Action Alert PLUS holding Amazon Inc.'s (AMZN - Get Report) Amazon Web Services at around 32%.

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