Global business news twenty four hours a day at Bloomberg dot com, the radio, plus mobile apps and on your radio. This is a Bloomberg Business Flash from Bloomberg World Headquarters. I'm Charlie Pellett. Moments ago Microsoft report had profitence sales that topped anile as estimates, lifted by an aggressive push into Internet based software and services for businesses. Fiscal fourth quarter revenue, including some adjustments, twenty two point six billion.
That compares with the average analy assessment for twenty two point one billion dollars. The now climbing to a record eight in a row, up twenty five points to eighteen thousand, five hundred fifty nine, up one tenth of one percent, SMP five hundred index down three to sixty three, a drop there of point one percent. The old on the tenure one point five five percent, up today by eight thirty seconds, and gold up three fifty ounce to thirteen thirty to a barrel UH announced uh it is hired
by three tenths of one percent. As for Barrel's crude oil down sixty four cents forty four sixty for West Texas Intermediate, a drop there of one point four percent. I'm Charlie Pelt. That's a Bloomberg business flash. You're listening to taking stock with bim Box and Kathleen Hayes on Bloomberg Radio. Shares of Microsoft are higher right now by
more than one and a quarter percent. This comes after the tech giant said that it earned sixty nine cents to share on revenue of twenty two point six billion. Analysts were just looking for the company to earn fifty eight cents to share on revenue of twenty two point one billion. Here to tell us more about Microsoft A rag Rana. He is a senior analyst Software and I
T Services for Bloomberg Intelligence. Bloomberg Intelligence provides unique real time research and context on a variety of industries and all markets and government factors that affect business. Our terminal customers can access this function at b I go on a rock. Thank you very much for coming in. Tell us a little bit about the details of Microsoft's report. I'm thinking cloud my my on the right track here. Absolutely.
You know. Cloud Asure was up hunted in eight percent, which is something we've been This is the cloud computing division of Microsoft. It's the infrastructure as a service for for Microsoft. We saw this yesterday also with vm D and and you know IBM to certain effect that Brexit vote has not impacted enterprise software spending at this point. And with Microsoft today we see again that you know, spending has been relatively healthy compared to the you know,
the huge volatility we saw across global markets. As far as the cloud division goes, does this mean that all cloud services are enjoying major popularity because I note that whenever we look at the results of Amazon, we always end up talking not just about retail but about those cloud services. That has been the trend for the last few quarters. And what we have seen, in fact in the last two or three that has been an acceleration in the adoption of cloud services, which we see across
not just with Amazon. We also see it in IBM cloud division. Yesterday they reported articles cloud services they're also doing very well. So as companies move their ID infrastructure from legacy servers to to to to the cloud, you will see a lot of these companies benefit from that. Tell us about mobile technology and Microsoft, I have to admit that I got all this information from reading your Bloomberg Intelligence piece about Microsoft. Well, you know, as as
we know, they have d emphasized phones. So the phone numbers were weak this quarter, as we expected. We are seeing a lot of their productivity applications that run on mobile devices they have done well and that's you know, that has been a trend for the past several quarters. Linked In the acquisition of Lincoln what what will that do to Microsoft's disposition as a cloud company but also as someone as you just described as uh, someone looking
to try to generate new revenue. See, Microsoft wants to be relevant in the cloud world, and they have a very good portfolio of services in the in the case
of infrastructure and platform. The software is a services where they have lagged companies like Salesforce or work Day and you know, we would we still need to see them to talk about what new products are going to come from this combination of Microsoft and LinkedIn, of whether it's going to be something of a of a sales channel or something of a you know, in a software that is online based that can help them breach that gap. Microsoft's cash balance, you note is over a hundred billion dollars.
They're going to spend some of that, well, they's just spend someone LinkedIn. So it's right, is that but is that likely. I mean, do they need to be buying let's say, cloud computing services in order to add to their portfolio. See, the cash balance is very strong for a lot a lot of these tech companies. But but at the same time, it's sparked outside the US, so they might have to borrow money to in order to
buy something. But you know that has been the case for a lot of these companies that if there is a whole in in their portfolio, they can use it, use this cache to to plug that. You've previously written that Microsoft's server products grew just five in the fiscal third quarter. You also mentioned that pressure on the personal computer growth is affecting Microsoft's obviously software sales, even though
the surface tap is doing pretty well. Yeah, but both those numbers were actually better than expected in this in this particular quarter, right, server products and you know cloud services were up eight percent, So that's you know that turned the other way. PC shipments, according to I d C in this quarter were not as bad as they would they expecting it, which I'm suspecting must have helped a lot portion of their you know, Windows, O, E, M, Business, etcetera.
And one of the comments I read was their their mix was towards the higher end products, which is similar to what you just mentioned the surface one, which is what drought drove some of the revenue. Talking about higher margin products, legacy products at Microsoft, don't they have higher margins than the cloud business. Yes, but that's because they are investing a lot more in cloud right now. So so as as that gate scale, as you see the benefits of that, you can expect margins of those cloud
products to improve this. But have at things like licensing revenue for commercial PCs as well as server products. Do we need to watch those as well? Yes, But at the same time, you know, when you have an enterprise license agreement or a newity business UM, you will see some of that, you know, is not as volatile as some of the transactional revenue, and which is when you know, when we mentioned about the turbo products, they actually did better than expected. And the Windows ten roll out, I
mean that continues to see what strong adoption. It has seen some strong adoption, but I think that the PC ship and data shows that maybe you know, it's the Windows tent is helping PC ship makers PC makers to UM you know, be able to get this refresh cycle that has been lagging for a while. I want to thank you very much for coming in and sharing your thoughts of Microsoft shares right now are up more than one and a half percent after reporting better than estimated
earnings and sales on a rug rona. Thank you very much of Bloomberg Intelligence senior industry analysts. Of course, Bloomberg Intelligence providing unique in real time research on a variety of industries and markets, as well as government factors that affect businesses. Our terminal customers can access this function at b I Go. I'm pim Fox and this is Bloomberg
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