Microsoft Shares Jump After Strong Earnings Report

Microsoft Corp.’s (NASDAQ:MSFT) share price is up sharply in pre-market trading after the company delivered better than expected quarterly earnings.

The Redmond, Washington-based software maker said its fiscal second-quarter sales rose 17%, a faster rate than analysts had projected, thanks to strong demand for corporate cloud-computing services and software tools that support at-home workers.

Microsoft’s revenue in the period ended December 31 rose to $43.1 billion U.S. That exceeded the $40.2 billion U.S. average estimate of analysts polled by Bloomberg, and marked Microsoft’s 14th straight quarter of double-digit revenue growth. Net income was $15.5 billion U.S., or $2.03 U.S. a share. Analysts had predicted $1.64 U.S.

Growth in the company’s Azure cloud-computing division jumped 50%. Microsoft has benefited as many corporate clients have accelerated a shift to the cloud, where they can store data and run applications via the Internet, and as businesses set up work teams with online productivity tools and teleconferencing software. Personal-computer sales also surged in the quarter, buoying the company’s flagship Windows operating-system.

Microsoft shares climbed about 8% and rose above $240 in extended trading following the report. The stock rose 5.7% during the quarter, compared with a 12% gain in the S&P 500 Index.

Stock increases earlier in the year left the company with an expanded price-to-future-earnings multiple that is larger than peers like Facebook and Google, according to Bloomberg.