Microsoft Riding High On Strong Surface, Cloud Performance

Microsoft's Q3 earnings showed its tablets and cloud services are really hitting their stride.

Microsoft Riding High On Strong Surface, Cloud Performance
Getty Images / Kevin Casey

Apple announcements may have made more headlines this month, but now it's Microsoft's turn to bask in the limelight — the tech giant beat out expectations during its Q3 earnings report.

It reported $23.2 billion in revenue, up from $18.53 billion this time last year. The boost was powered in part by Microsoft's Surface tablet, which seems to finally be hitting its stride.

"It looks like the revenue coming from the Surface for the third quarter came in at $908 million versus just $400 million a year ago, so that's actually a good thing for Surface, for the company as well." (Video via Fox Business)

Remember, in July of last year Microsoft was seeing headlines like these as it wrote off nearly $1 billion dollars in Surface hardware.

Now, tech bloggers are encouraged by the turnaround. Microsoft is finally dialing in the right ratio of price to features. It just took a couple quarters.

The Verge says, "If Surface Pro 3 sales continue to be strong, then Surface could easily be Microsoft's next billion dollar business."

Some other highlights from the report: Microsoft's commercial cloud business is exploding. Profit from operations was up 194 percent to $805 million.

ReadWrite says that rate of growth isn't sustainable but points out for sake of perspective: "Should Microsoft's cloud business keep growing at this rate, it could eclipse the company's entire Windows business in just four years."

And some lowlights — Microsoft is still trying to get over the rough process of absorbing phone-maker Nokia, which contributed to more than $1 billion dollars in acquisition and restructuring charges.

"These results suggesting things at Nokia continue to stink and that the acquisition hasn't shown the signs of success." (Video via Bloomberg)

Shares jumped on the overall positive earnings report, pushing Microsoft's stock almost 3 percent higher before the markets opened Friday.

This video includes images from Getty Images.