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Microsoft’s cloud business continues to shine as earnings again top estimates

The company said its purchase of LinkedIn should close in the current quarter.

With its cloud business continuing to grow, Microsoft on Thursday turned in financial results ahead of what many analysts were expecting.

The company reported $4.7 billion in net income, or 60 cents per share, on $20.5 billion in revenue. Excluding certain items, the company said it had earnings of $6 billion, or 76 cents per share, on adjusted revenue of $22.3 billion

Wall Street was expecting around $21.7 billion in adjusted revenue and earnings of 68 cents per share, according to various consensus estimates.

While the cloud and server businesses remained healthy, Windows sales were relatively flat for the quarter, while phone sales continued their decline, with revenue down 72 percent from a year ago.

The company said it expects to close two big deals in the current quarter: Its $26 billion acquisition of LinkedIn and the divestiture of its entry-level mobile phone business.

Shares rose following the earnings report, changing hands recently at $60.39, up $3.14, or more than 5 percent.

Microsoft handily beat earnings and sales forecasts last quarter too amid continued strength in its cloud business.

Update, 2:06 p.m. PT: Microsoft’s head of investor relations Chris Suh said the results were strong in the server and cloud businesses. Even the Windows PC business came in slightly better than the company had expected, Suh said.

“We’re pretty pleased with the results across the board,” Suh told Recode, noting that the cloud growth didn’t come at the expense of Microsoft’s traditional server software. The combined server and commercial cloud businesses were up 11 percent year-over-year, he said.

“All around I would say there is broad-based strength,” he said.

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