Microsoft Corp. may not be cool, but its sales continue to defy expectations by growing at a much faster clip than those of its business-technology peers.
Microsoft’s revenue rose 11% from a year earlier in the three months ended Sept. 30, excluding Nokia ’s mobile-phone business that Microsoft purchased last spring.
Meanwhile, competitors in corporate technology—such as International Business Machines Corp. , Hewlett-Packard Co. and Oracle Corp. —posted shrinking or slow sales growth.
“Microsoft is bucking the trend,” said Daniel Ives, an analyst with FBR Capital Markets.
Microsoft’s stock rose 3.1% in after-hours trading Thursday following the release of its financial report for the fiscal first quarter. The company’s stock price has reflected strong revenue and profit growth in the past year.
Shares climbed 33% in the past year through Thursday’s market close, far outpacing the S&P 500 stock index over the period.
The company’s market value recently surpassed that of Google Inc. for the first time since June 2013.
The latest quarterly results continue a charmed first year in office for Satya Nadella , who in February was named chief executive, only the third in Microsoft’s history.
Mr. Nadella has focused on many of the same lines of business as his predecessors, and earlier investments in cloud computing and the Xbox videogame console have paid off under his watch.
Mr. Nadella has won over Wall Street with his willingness to cut jobs, favor innovation over existing businesses and de-emphasize products outside Microsoft’s core offerings.
In the most recent quarter, Microsoft’s revenue from software for business customers rose more than 9.5% from a year earlier.
The company had robust growth in both newer offerings such as Microsoft Office 365 (an online version of the popular desk-jockey software suite) and mature products like the version of Windows for computer servers.
Cloud software sold to businesses—primarily Office 365, the Microsoft Dynamics CRM sales tool and the Azure cloud-computing service—more than doubled to $1.18 billion, or roughly 5.1% of total revenue for the quarter.
But Microsoft executives said during a conference call that customers for Azure, which lets corporate IT departments and software developers rent computing horsepower and storage capacity by the hour, also buy the company’s traditional corporate software.
Microsoft’s mobile business remains a trouble spot. Sales of Windows-powered Nokia smartphones rose, but the company continues to lose market share toApple Inc. and manufacturers of phones that run Google’s Android operating software.
Microsoft made less money than it did a year earlier from its mobile-phone operating software business, largely because Android-phone makers such asSamsung Electronics Co. sold more of their inexpensive phones, which generate lower fees for Microsoft. Android phone makers pay Microsoft a royalty for Microsoft patents used in the Google operating system.
Sales of Windows operating software for personal computers also declined, but less than in prior quarters, driven by improving demand for PCs since their 2013 swoon.
Microsoft’s latest quarterly results continue a charmed first year in office for CEO Satya Nadella. Agence France-Presse/Getty Images
The company made more headway with its other consumer hardware products.
Revenue more than doubled for the Surface tablet computer, which sold poorly when it launched two years ago. The Surface Pro 3, released in June, received a more positive reception, the company said. The newer device is positioned more as a laptop replacement than a tablet computer.
Microsoft also sold twice as many Xboxes as a year ago, it said, helped by a $100 price cut for the latest model.
Despite Microsoft’s recent successes, Google tends to get the buzz once reserved for the Redmond, Wash., company.
In an interview, Microsoft Chief Financial Officer Amy Hood was unfazed. “I wasn’t that cool in high school, either,” she said.
Overall in the quarter, Microsoft revenue was $23.2 billion, including the Nokia business, compared with $18.5 billion a year ago. Net income fell to $4.5 billion, or 54 cents a share, from $5.2 billion, or 62 cents, in the same quarter last year.
Microsoft’s profit was weighed down by about $1.1 billion, or 11 cents a share, in costs related to a massive round of job cuts Mr. Nadella pushed through this summer and costs to integrate Nokia’s business into the rest of Microsoft.
Corrections & Amplifications
An earlier version of this story incorrectly said Microsoft’s decline in mobile-software revenue was due to a shift toward lower-cost Windows smartphones.
Write to Shira Ovide at firstname.lastname@example.org
Comcast Corp. CMCSA -0.67% and Time Warner Cable Inc. TWC -0.70% fired back at critics of their $45 billion proposed merger, defending the transaction against concerns it would make Comcast the gatekeeper of the online and pay TV world.
The companies' comments, filed with the Federal Communications Commission late Tuesday night, were in reply to a first round of comments about the proposed merger, which was announced in February and must be approved by the FCC and Justice Department. Combining the nation's two largest cable and broadband providers would create a company that would control roughly 30% of the cable market, after divesting almost four million Time Warner Cable subscribers, which they have agreed to as part of the deal.
Comcast and Time Warner Cable have presented the deal to regulators as a straightforward cable merger that wouldn't reduce the number of choices for consumers in any market. But regulators have zeroed in on the broadband side of the deal, and are applying intense scrutiny, according to people familiar with the reviews, out of concern that Comcast would become the dominant high-speed broadband provider in almost all of the major urban areas of the U.S.
FCC Chairman Tom Wheeler argued in a speech earlier this month that the broadband market isn't competitive, especially at the higher speeds needed for online video, which is the source of most peak Web traffic. Mr. Wheeler noted most Americans have only one or two choices for high-speed home broadband access, typically their local cable provider, and said 10 megabits per second is the minimum level of speed to stream HD video. That rules out most DSL and wireless providers, which typically offer speeds below 5 megabits per second.
The companies argue that the FCC shouldn't discount competition from slower forms of broadband for the purpose of the merger review. They say 4 megabits per second is fast enough to stream HD video, and that most households have only one or two members, and therefore don't require the 25 megabits per second speeds that Mr. Wheeler has targeted as a goal.
"[I]t makes no sense, when defining a 'market' for competitive purposes, to exclude either technologies or speeds that tens of millions of broadband customers use today and will still use tomorrow," the comments state.
Comcast and Time Warner Cable also say their critics are opportunistically leveraging the merger to try to extract concessions for their own benefit. One company singled out is Netflix Inc., NFLX +1.03% which struck a paid interconnection deal with Comcast earlier this year to speed the delivery of traffic on the back end between their respective networks. The comments note Netflix CEO Reed Hastings initially expressed satisfaction with the arrangement, before later criticizing Comcast and opposing the merger. Netflix has argued that the FCC should mandate that such interconnection deals should be free of charge.
Many programmers also have expressed concern in private over the leverage the combined company would have in negotiations, particularly in areas such as online programming and retransmission consent.
In its comments, Comcast said one of the deal's most vocal critics, Discovery Communications Inc., DISCA -0.89% has demanded "unwarranted business concessions from Comcast as a condition of Discovery's nonopposition to the Transaction."
Write to Gautham Nagesh at email@example.com
Watch the entire merger hearing on CSPAN below: