Microsoft Beats Expectations as Cloud Segment Shows Strength


WATCH: More tech videos on TheStreet TV | More videos from Brittany Umar

NEW YORK (TheStreet) -- Shares of Microsoft  (MSFT) are climbing on Friday after the company reported better-than-expected quarterly profit despite declining PC sales.

VIDEO TRANSCRIPT:

Shares of Microsoft are climbing on Friday after the company managed to beat analyst expectations despite declining PC sales.

Microsoft reported quarterly profit of about $5.6 billion, or $0.68 a share, for the quarter, topping last year's results and analyst expectations of profit of 63 cents a share, according to Thomson Reuters. Sales fell by 0.4% to $20.4 billion, in line with analyst estimates.

Market research firms Gartner and IDC estimate that personal computer shipments fell by two-to-four-percent.  That was partially offset by a surge in customers who paid to upgrade their computers in light of Microsoft's decision to end support for its 13-year-old Windows XP operating system on April 18.  Revenue from devices and consumer products like the XBox One rose 12%.

It was the first quarterly earnings release under new CEO Satya Nadella, who has been behind the company's push into cloud computing.  Sales from Microsoft's Office 365 cloud product more than doubled in the period, gaining one million subscribers, while gross margin in the Commercial Other segment, which contains cloud products, rose by 80%.

At last check, shares of Microsoft were inching higher by 0.3% to $39.98.

In New York, I'm Brittany Umar for TheStreet.

-- Written by Brittany Umar in New York.

If you liked this article you might like

Stocks Carve Out New Lows as Chances for December Hike Surge

Adobe Is a Horse -- Jim Cramer Explains Why

Microsoft's New Xbox One X Shows It's Done Trying to Please Everyone

Microsoft Launches Pre-Orders of $499 Xbox One X

Twitter Appoints Former Google CFO to Board of Directors