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October 21, 2016updated 28 Oct 2016 2:22pm

Azure cloud growth gives Microsoft a quarter to remember

Share prices beat 1999 high.

By James Nunns

Microsoft posted a $4.7bn profit for its 2017 Q1 financial results. Boosted by an 8% revenue rise in the Intelligent Cloud division on the year to reach $6.4bn and a 116% revenue growth in Azure, the company saw its overall sales hit $20.5bn, up $100m from the previous quarter.

This is the first time that Microsoft has reported the figures for its cloud services under the Intelligent Cloud segment.

Highlights in the segment saw server products and cloud services revenue increase 11% and Enterprise services revenue increase by 2%.

Operating income stood at $5.2bn, down 10% on the same period last year.

The Productivity and Business Processes unit, which includes Microsoft Office and other apps, made $6.7bn for the quarter, a growth of 6%. The Dynamics product line saw the biggest growth of 11% for the year and Office revenue rose 8%.

Microsoft's cloud focusing with Azure appears to be paying off.

Microsoft’s cloud focusing with Azure appears to be paying off.

While cloud and other units of the company did well Microsoft saw revenues fall in Personal Computing. Revenues fell 2%, OEM licensing revenue was flat, and gaming revenue fell 5%.

Windows Phone revenues dropped 72%, however, search posted 9% revenue growth.

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The big outcome of the financial report was that it resulted in a 6% rise in shares to $60.73, beating the company’s previous high of $59.97 in December 1999.

Under the leadership of Satya Nadella, who took over from Steve Ballmer as CEO in 2014, the company has seen its shares rise from below $37.

Nadella said: “We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences.

“We continue to innovate, grow engagement, and build our total addressable market.”

Amy Hood, EVP and CFO at Microsoft said that the first quarter results showed continued demand for its cloud-bases services.

The acquisition of LinkedIn is expected to be completed in the second quarter of the year and the company is also hoping to complete the sale of its feature phone business in the same period.

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