Microsoft shines in Q3 as cloud, Office 365 posts strong sales gains

Microsoft's third quarter results were strong across its various units. Office 365 remains the juggernaut.

Microsoft's third quarter handily topped expectations as the company's productivity unit, Office 365 and commercial cloud revenue surged.

The software giant delivered strong results across its units. The company reported third quarter net income of $7.4 billion, or 95 cents a share, on revenue of $26.8 billion.

Wall Street was expecting Microsoft to report fiscal third quarter earnings of 84 cents a share on revenue of $25.77 billion.

What stands out about Microsoft's quarter is that only had a few businesses that didn't grow.

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By unit, it's worth noting that Microsoft's commercial cloud revenue was up 58 percent from a year ago. The productivity and business processes unit had sales of $9 billion, up 17 percent from a year ago.

In addition, Office 365 commercial revenue was up 42 percent with consumer Office sales up 12 percent. Microsoft now has 30.6 million Office 365 consumer subscribers.

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Among the key figures:

  • LinkedIn revenue was up 37 percent to $1.33 billion. LinkedIn operating income was $133 million.
  • Dynamics products and cloud service revenue was up 17 percent.
  • Azure revenue growth was 93 percent.
  • Windows commercial products and cloud services revenue was up 21 percent due to multi-year agreements.
  • Surface revenue was up 32 percent.
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