Microsoft reports 17% revenue growth as cloud business accelerates

Microsoft stock rose as much as 6% in extended trading on Tuesday after the company reported fiscal second-quarter earnings and Azure cloud revenue growth that exceeded analysts' expectations.

Here's how the company did:
• Earnings: $2.03 per share, adjusted, vs. $1.64 per share as expected by analysts, according to Refinitiv.
• Revenue: $43.08 billion, vs. $40.18 billion as expected by analysts, according to Refinitiv.

Microsoft revenue grew 17% on an annualized basis, up from 12% growth in the prior quarter, according to a statement.

Revenue from Microsoft's Intelligent Cloud business segment, which includes the Azure public cloud, server products such as Windows Server, GitHub and enterprise services, totaled $14.60 billion. That's up 23% year over year and above the $13.77 billion consensus among analysts polled by FactSet.

Microsoft said Azure revenue grew 50%. Analysts had expected around 42% growth. Microsoft doesn't disclose Azure revenue in dollars.

The More Personal Computing segment, containing Windows, gaming, devices and search advertising, generated $15.12 billion in revenue, which was up 14% and came in higher than the $13.47 billion FactSet consensus estimate. Technology industry research company Gartner estimated that PC shipments, excluding Chromebooks, grew 10.7% in the quarter.

The segment's operating margin narrowed to 34.6% from 40% following the introduction of two Xbox video-game consoles in November. Analysts polled by FactSet had expected a 26% margin from the segment.

The Productivity and Business Processes segment, including Office, Dynamics and LinkedIn, produced $13.35 billion in revenue, which was up 13% and more than the $12.89 billion consensus.