Cloud rivalry with Amazon helps Microsoft boost profit

REDMOND, Wash. — Microsoft Corp. reported a quarterly profit of $ 8.9 billion on Thursday, boosted in part by its efforts to rival Amazon as a key provider of cloud computing for retailers and other businesses.

Microsoft said it had net income of $ 1.14 per share in its fiscal fourth quarter, which ended June 30.

Earnings, adjusted for nonrecurring gains, were $ 1.13 per share.

The results topped Wall Street expectations.

The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $ 1.07 per share.

The increase in net income was 10 percent.

Microsoft also surpassed forecasts by posting revenue of $ 30.1 billion in the period, a 17 percent increase over the same quarter of last year. Eleven analysts surveyed by Zacks expected an average of $ 29.2 billion.

The company’s fastest- growing segment was what it calls the "intelligent cloud," which includes server products and its Azure cloudcomputing platform.

The segment’s revenue was $ 9.6 billion, up 23 percent from a year earlier.

Microsoft is being aided by the "threat of Amazon" as retailers look for a cloud- computing partner that is not also a competitor in e- commerce, said Alex Zukin, an analyst at Piper Jaffray.

Microsoft last week announced a fiveyear cloud- computing partnership with Walmart that accelerates an existing relationship between the firms.

"It’s a convenience thing," Zukin said. "Walmart is looking for an innovation partner to compete on the same playing field as Amazon."

Microsoft also reported 25 percent growth in revenue from its Surface line of laptops.

That comes as the company is preparing to launch a more- portable tablet called the Surface Go.

Microsoft shares have gained 22 percent this year, while the Standard & Poor’s 500 index has increased 5 percent.