Microsoft reported better-than-expected quarterly adjusted revenue for the ninth quarter in a row, boosted by burgeoning demand for its cloud products, sending it shares soaring in after-hours trading on Thursday.

The company, under Chief Executive Satya Nadella, has been shifting its focus to software and cloud services as demand for the Windows operating system slows in a weak PC market.

"The Nadella strategy is working and you are seeing the results in the quarter," Bernstein analyst Mark Moerdler said.

Microsoft’s shares rose as much as 9.8 per cent to $52.75 in after-hours trading, their highest since March 2000.

Microsoft has also been cutting costs and streamlining its operations to focus on more lucrative businesses. In the latest cost-cutting exercise, 1,000 jobs, or about 1 per cent of Microsoft’s workforce, are being eliminated.

“The job reductions were spread across more than one business area and country and reflect adaptations to business needs,” a spokeswoman said in an email. The cuts are in addition to the 7,800 jobs

Microsoft said it would cut in July. The first-quarter results announced on Thursday were the first under a new reporting structure that reduced reporting segments to three from six, designed to help the software giant show off its cloud and mobile businesses.

Revenue from Microsoft’s cloud business, which includes products such as Windows Server and cloud-based platforms such as Azure, rose 8 percent to $5.9 billion and is expected to reach $6.2-$6.3 billion in the current quarter.

Excluding the impact of the strong dollar, revenue in the business rose 14 per cent, accounting for about 29 per cent of overall revenue in the quarter ended September 30th.

"It is a really strong quarter and these guys are ahead of most of the traditional software companies moving to the cloud in terms of where they are in the evolution," Mr Moerdler said. Strong growth in cloud services also helped Amazon. com Inc report a surprise profit on Thursday.

Reuters