Microsoft's profits grow as company pushes cloud computing

Satya Nadella, chief executive of Microsoft. Photo / Getty Images

Microsoft's efforts to build its Internet cloud business seem to paying off as a healthy boost in sales helped push up profits for the quarter ending in June.

The technology company, which grew to prominence for selling software that powers personal computers, has been working to turn itself into a leader in cloud computing as it works to catch up to the likes of Amazon.com.

Last month, Microsoft laid off thousands of employees to restructure its sales force to better market its cloud software.

For the three months ending in June, the company posted a 97 per cent increase in revenue growth from Azure, the company's primary cloud software. Server products and cloud revenue also increased 15 per cent.

All told, the Redmond, Washington-based company reported that profits doubled for the quarter, its fourth, to US$6.5 billion (NZ$8.7b), or 83 cents per share, on US$23.3 billion (NZ$31b) in revenue - a 13 per cent increase from the same period a year ago.

"Innovation across our cloud platforms drove strong results this quarter," Satya Nadella, chief executive at Microsoft, said in a company statement.

The company said profits were helped by a US$1.8 billion (NZ$2.4b) tax gain that came as a result of a write-off of the company's struggling phone business that was not previously deductible.

Microsoft's largest business division, which is its productivity and businesses unit, brought in US$8.4 billion (NZ$11.2b) in revenue, which is a 21 per cent increase from last year. That division includes Microsoft Office.

Microsoft's revenue from its personal computing software unit was US$8.8 billion (NZ$11.8b), a 2 per cent decrease from the previous year. That sector includes the company's phone sales and gaming consoles such as Xbox.

LinkedIn, the company's business-oriented social media platform, brought in US$1.1 billion for the fourth quarter.

For the full fiscal year, Microsoft said, revenue rose 5 per cent and profits jumped 26 per cent.