Microsoft (MSFT, Financial) shares saw a modest gain of 1% after the tech titan posted better-than-expected first-quarter profit and revenue. This lukewarm response in the stock market was prompted by the company's warning of a future growth rate lower than anticipated despite the robust quarterly earnings.

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On the adjusted basis for the period ending September 30, the Microsoft corporation revealed earnings of $3.30 for every share, well above the estimated $3.10.Moreover, Revenue reached $65.59 billion, surpassing the projected $64.51 billion. The company statement showed that its total revenues were up 16% from the previous year, and its net earnings were up 11% to $24.67bn from $22.29bn.

During a recent teleconference, Microsoft's Chief Executive Officer Satya Nadella remained hopeful for the company during the second half of the FY. Microsoft also changed its business segment reporting to better align with its management structure, which was also identified. Such reclassification now categorizes mobility and security services with productivity, business processes, and product revenue from Windows.

This cloud segment recorded a 12% growth in its revenues, reaching $28.32 billion, against the $27.9 billion market consensus expected. For instance, Microsoft has enhanced cloud transparency by separating mobility and security from Azure, Azure revenues, and Power BI data analysis. Azure itself grew by 33%, which in turn helped boost the intelligent cloud division's revenue to $24.09 billion, up 20% and slightly ahead of estimates.

This article first appeared on GuruFocus.