Microsoft saw profits in its third quarter of fiscal 2015 fall by five percent, despite commercial cloud revenues more than doubling over the same period last year.
Overall Microsoft revenues grew by six percent to $21.72bn in the quarter. However, this was not enough to see a rise in profits, which fell from $6.97bn a year ago to $6.59bn this time around.
The dollar was partly to blame for this loss. Microsoft admitted that income would have been down four percent if currency fluctuations were discounted from the results.
The company said that another cause of the profit decline was a $190m charge for “restructuring expenses” related to the ongoing integration of the Nokia Devices and Services business.
Key areas of growth for Microsoft included commercial cloud revenue up 106 percent after strong demand for the Office 365, Azure and Dynamics CRM Online services.
The huge growth for Microsoft chimes with wider industry trends around cloud. IBM also revealed this week that it had seen strong cloud demand and IDC predicted that worldwide cloud spending will hit $32bn in 2015.
Meanwhile, Microsoft said that the Windows Server, System Center Server and SQL Server products are in strong demand with sales rising 25 percent.
Consumer sales were also strong, and Office 365 Consumer subscribers reached 12.4 million, up 35 percent sequentially.
Despite the fall in profits, chief executive Satya Nadella said that the firm is on track with strong revenue growth in areas such as cloud and that the company has plenty more up its sleeve to encourage the market and investors.
"Increasingly, customers are choosing Microsoft cloud services to transform their own businesses, going beyond just moving existing workloads to the cloud. These results showcase our ability to transform and perform simultaneously," Nadella said in a Microsoft earnings call.
Nadella also revealed that the firm's change in attitude over the past year or so to provide its tools for rival platforms is paying off.
"Core to our mobile first strategy is to ensure that our service endpoints are on every mobile device, and to that end we have seen continued momentum with more than 100 million downloads of Office on iPhones, iPads and Android tablets," he said.
Microsoft will be hoping that the launch of Windows 10 further boosts the company. A launch date of late July is expected, and there could well be pent up demand for the operating system as millions of machines are still running Windows XP.
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