'The core franchises that represent what people are most excited about for owning Microsoft - those were the more resilient areas, and they continue to shine through maybe a touch of deceleration, but those parts of the business were certainly more reassuring,' Choi said. Hurdles from exchange rates advertising spending and computer sales were relatively well understood among investors heading into the earnings report, said Peter Choi, a senior research analyst at Vontobel Asset Management, which held $1.11 billion in Microsoft stock at the end of March, according to a filing. The company said factory shutdowns in China in April and May and a worsening computer market in June reduced Windows revenue from device makers by $300 million. Technology industry researcher Gartner said earlier this month that logistical disruptions in the quarter had contributed to a 12.6% decrease in quarterly PC shipments, a key input for that metric. Sales of Windows licenses to device makers fell by 2% in the quarter. Still, a contraction in advertising spending resulted in a $100 million cut to revenue for the search and news advertising and LinkedIn categories. Microsoft said search and news advertising, excluding traffic-acquisition costs, rose 18% thanks to stronger search volume and revenue per search. Revenue was up 2% year over year and barely lower than the $14.65 billion StreetAccount consensus.

The More Personal Computing segment featuring the Windows operating system, Xbox video-game consoles, the Bing search engine and Surface devices delivered $14.36 billion in revenue for the quarter. But she said there was 'some moderation in new deal volume outside of E5 particularly in the small and medium business customer segment.' The premium E5 tier accounts for 12% of all commercial Office 365 subscriptions, up from 8% one year ago. That was up nearly 13% and slightly less than the StreetAccount consensus of $16.66 billion. Microsoft's Productivity and Business Processes segment including Office productivity software, Dynamics and LinkedIn posted $16.60 billion in revenue.

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