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Microsoft Is Rewarded for Turning to the Cloud

SEATTLE — A few years ago, Microsoft appeared to be another tech has-been, having whiffed on its efforts to compete in mobile phones and internet search. Although it is too soon to say whether Microsoft can pull off a full-blown renaissance the way Apple has, the company is firmly back in favor.

Not long after its shares reached another all-time high at the close of regular trading, Microsoft reported on Thursday that its profit in the most recent quarter more than doubled from a year ago. One reason for that jump was the failure of its mobile phone business, which produced big losses for the company in past years, yielding a $1.8 billion tax benefit that Microsoft was able to recognize last quarter.

At the same time, the company delivered growth where it mattered to investors — in the cloud business that has become Exhibit A for bulls convinced that Microsoft has a grip on the future of computing. The company’s shares popped more than 3 percent in after-hours trading after the release of the results.

Microsoft’s cloud-computing business was the star of the company’s fiscal fourth-quarter earnings report, as it has been for many quarters. Revenue from its Intelligent Cloud business rose 11 percent to $7.4 billion.

Revenue from one of the most closely watched pieces of that business, Microsoft’s Azure cloud service, jumped 97 percent. After being tardy to cloud computing, Azure is the second biggest cloud business after Amazon Web Services, the offering from Microsoft’s crosstown rival.

In a call with analysts, Microsoft’s chief financial officer, Amy Hood, said the company closed the highest number of multimillion-dollar Azure deals to date during the quarter. Ms. Hood also said that for the first time, the revenue Microsoft received from the commercial version of Office 365 — a cloud version of its productivity applications that customers subscribe to — surpassed the revenue the company received from traditional sales of the software.

Over all, for the quarter that ended June 30, net income was $6.51 billion, or 83 cents a share, up from $3.12 billion, or 39 cents a share, in the same period a year earlier. Microsoft’s revenue rose to $23.32 billion from $20.61 billion. After adjusting those figures to include deferred revenue from its Windows 10 operating system and other items, Microsoft’s revenue was $24.7 billion and 98 cents a share, which exceeded Wall Street forecasts.

The average earnings estimate of analysts surveyed by Thomson Reuters was 71 cents a share, while the average revenue estimate was $24.27 billion. Analysts did not include the tax benefit from Microsoft’s phone business, which amounted to 23 cents a share, in their earnings estimates, so a more accurate comparison with the 71 cents a share forecast was 75 cents.

There are still plenty of Microsoft skeptics who believe that the company has not yet shown the ability to invent new businesses quite the way Apple did with the iPhone and the iPad. Clement Thibault, an analyst at Investing.com, is one of them. He believes that the company’s stock has become too rich for the progress it has shown.

“I’d like to see more initiatives and growth there,” Mr. Thibault said, “instead of pinning all our hopes on cloud.”

A version of this article appears in print on  , Section B, Page 2 of the New York edition with the headline: Microsoft Is Rewarded For Turning To the Cloud. Order Reprints | Today’s Paper | Subscribe

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