Annual revenue fell at Microsoft Corp. for the first time since 2009, as the software giant continues to shift its business from the slowing personal computer market and server software sales to cloud computing.

Still, shares rose 3.3% to $54.81 in recent after-hours trading as per-share earnings easily beat analysts' expectations and the company's cloud and productivity businesses posted revenue growth for the quarter and year.

The Redmond, Wash., software giant registered $85.32 billion in total annual revenue, down 8.8% from fiscal 2015. Sales have dwindled as the company's flagship operating system, Windows, continues to post sluggish growth. For the year, revenue from the More Personal Computing segment, which includes Windows, fell 6.3% to $40.46 billion.

For the fourth quarter, More Personal Computing segment sales fell 3.7% to $8.9 billion, or a 2% decline in constant currency. Revenue from computer makers rose 11%.

Microsoft is betting its future on cloud sales and, in that business, the company reported big gains. The company's Intelligent Cloud segment, which includes its Azure on-demand computing services, rose 6.6% to $6.71 billion. The company said revenue was hurt by currency by about 3%.

The Productivity and Business Processes segment, which includes Microsoft's Office franchise as well as its Dynamics business products, posted a sales gain of 4.6% to $6.97 billion. The unfavorable currency impact for that segment was about 3%.

Microsoft said last week that it won't hit its target of one billion Windows 10 devices in use by June 2018, blaming it on the company's pullback from making smartphones that would have run Windows 10. The company said last month that more than 350 million devices ran the operating system.

Even with Windows challenges, Microsoft's Surface line of computers remains popular. The company said Surface revenue increased 9% in constant currency.

Microsoft posted $3.12 billion in fourth-quarter net income, or 39 cents a share, compared with a loss of $3.2 billion, or 40 cents a share, a year ago. The year-ago results included $8.4 billion in charges related to the company's struggling mobile-phone operation.

Excluding the impact of revenue deferrals and restructuring charges, adjusted earnings rose to 69 cents from 62 cents a year earlier. Revenue slid 7.1% to $20.61 billion and was $22.64 billion on an adjusted basis.

Analysts surveyed by Thomson Reuters had expected Microsoft to report adjusted earnings per share of 58 cents and sales of $22.1 billion.

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

July 19, 2016 16:55 ET (20:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Microsoft Charts.
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Microsoft Charts.