Microsoft sales beat Street hopes, shares rise

SEATTLE (Reuters) - Microsoft Corp reported higher-than-expected revenue for its fiscal first quarter on Thursday, helped by stronger sales of its phones, Surface tablets and cloud-computing products for companies, while keeping its profit margins intact.

The results allayed fears of investors in recent days that the industry shift toward lower-margin cloud services was proving hard for established technology leaders to master.

Microsoft shares, which have climbed 33 percent over the past year, rose another 3 percent in after-hours trading to $46.37.

"In light of recent negative earnings results from tech bellwethers Oracle, IBM, SAP, VMware, and EMC, Microsoft is bucking the trend and we would label these September results as a solid accomplishment," said Daniel Ives, an analyst at FBR Capital Markets. 

Microsoft's quarterly profit fell 13 percent, largely due to an expected $1.1 billion charge related to mass layoffs announced in July, which lopped 11 cents per share off earnings.

Including that charge, the world's largest software company reported profit of $4.5 billion, or 54 cents per share, compared with $5.2 billion, or 62 cents per share, in the year-ago quarter.

Wall Street had expected 49 cents per share, including the charge, according to Thomson Reuters I/B/E/S.

Revenue rose 25 percent to $23.2 billion, helped by the phone business it bought from Nokia in April, easily beating analysts' average estimate of $22 billion.

(Reporting by Bill Rigby; Editing by Chris Reese and Richard Chang)