Microsoft says improving sales led to 38% rise in profits in Dec quarter

Microsoft has said that its profits rose sharply in the past quarter, boosted by improving sales across a range of consumer products and business services, sending its shares higher.

Overall profit for the quarter ending December 31 rose 38 per cent from a year ago to $11.6 billion, while revenues jumped 14 per cent to $36.9 billion.

The earnings highlighted Microsoft's successful transition from a pure consumer software firm to a diversified tech giant focused heavily on business services.

"We are innovating across every layer of our differentiated technology stack," chief executive Satya Nadella said in releasing the fiscal second quarter results.

"We are working to ensure the technology we build is inclusive, trusted and creates a more sustainable world." The results showed strong revenue gains (27 per cent) for Microsoft's cloud computing division and a modest two per cent increase in the personal computing division, which includes the Windows operating system and Surface devices.

The division for productivity and business, including the Office software suite and the LinkedIn social network, saw a rise in revenue of 17 per cent.

Microsoft shares gained two per cent in after-hours trade following the release.