Shares climbed 5 percent in after-hours trading, to $54.67.
In all for the period ended December the 31st, Microsoft reported a profit of $US5 billion, or 62 cents a share, down from $US 5.86 billion, or 71 cents a share, a year earlier. Subscriptions for Office 365 productivity software also lured both businesses and consumers, and even Windows sales came in better than the overall PC market, fueled by the adoption of Windows 10.
Translate this to figures and you get a few more percentage points for Bing, so Microsoft's search engine could very soon get closer to the 30 percent threshold in this particular business that has until now been dominated by Google.
Total revenue, however, fell 10.1% to $23.8bn, squeezed by a strong dollar as well as a weak personal computer market that has reduced demand for Microsoft's Windows operating system. In other words, this wasn't unexpected.
In terms of revenue, Microsoft's "Intelligent Cloud" group, which includes Azure as well as server products and consulting services, was the only group that that was up in the quarter. Office 365 subscribers grew to 20.6 million, and Windows 10 is now on more than 200 million devices.
Revenue in its Intelligent Cloud segment grew 5% (up 11% in constant currency) to $6.3 billion. Not counting the Nokia write-down, Microsoft actually beat analyst projections for the previous quarter.
Microsoft just released its earnings report for the last quarter, and the major takeaway is that Windows Phone sales were beyond bleak, while Surface revenue performed decently.
While revenue continues to decline, primarily because of the phone segment, Microsoft received positive contributions from Surface, Xbox, and Windows 10 in the holiday quarter.