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Cloud services, Xbox help Microsoft beat estimates

Microsoft Corp.’s fiscal second-quarter sales and profit exceeded analysts’ estimates as the world’s largest software maker benefited from growth in cloud services and a resurgent Xbox One game console.

Profit excluding certain costs in the period ended Dec. 31 was 77 cents a share. Revenue rose 8 percent to $26.5 billion, the company said Monday in a statement. Analysts on average projected profit of 75 cents on sales of $26.3 billion, according to data compiled by Bloomberg.

As Satya Nadella approaches his first anniversary as chief executive officer, Microsoft is boosting sales of its Azure cloud software and Web-based versions of its work-productivity programs, called Office 365.

A price cut and new games also jump-started ailing demand for Xbox One, which was the top selling video-game console in the U.S. for the holiday season.

“If you compare it to the rest of large-cap enterprise tech, it continues to be a little bit of a shining star,” said Daniel Ives, an analyst at FBR Capital Markets & Co. “Xbox gives them some of a tailwind in the quarter, Azure continues to be strong and the move to Office 365 is still a catalyst.”

The shares of Redmond, Wash.-based Microsoft slipped in extended trading following the report. They dropped less than 1 percent to $47.01 at the close in New York. The stock climbed 24 percent last year, buoyed by optimism for Nadella’s plan to focus on Web-based software and services to lessen the company’s reliance on the slumping personal-computer market. The gain compared with an increase of 11 percent in the Standard & Poor’s 500 Index.

Including charges related to Microsoft’s biggest-ever round of job cuts, which began in July, the company reported second-quarter net income of $5.86 billion, or 71 cents a share.