Microsoft Corp. easily trumped expectations with an earnings report Wednesday afternoon that displayed double-digit percentage gains in profit and sales, but the Azure cloud business’s growth rate continued to decline.

The most valuable public company in the U.S. reported fiscal first-quarter profit of $10.7 billion, or $1.38 a share, on revenue of $33.1 billion, up from $1.14 a share on sales of $29.08 billion a year ago. Analysts on average expected earnings of $1.25 a share on revenue of $32.15 billion, according to FactSet.

Microsoft MSFT, +2.27% stock closed with a 0.6% gain at $137.24, giving the company a market capitalization of $1.056 trillion, declined less than 1% in after-hours trading following the release of the results, then rose to a gain of 0.5% after Microsoft gave a slightly more optimistic full-year forecast. It was up 1.2% in premarket trade Thursday.

The stock has increased more than 34% so far this year, as the S&P 500 index SPX, +1.59% has gained 19.5% and the Dow Jones Industrial Average DJIA, +1.33% — which counts Microsoft as a component — has increased 14.8%.

Microsoft’s rise to a trillion-dollar company has been driven by large gains in cloud-computing services, as it attempts to challenge Amazon.com Inc.’s AMZN, +2.49% leading Amazon Web Services offering with its own Azure cloud service. Microsoft said that its “Intelligent Cloud” segment recorded revenue of $10.8 billion, higher than the average analyst estimate of $10.42 billion. Microsoft said that Azure grew by 59%; the company does not break out Azure revenue nor operating income specifically, as Amazon does with AWS.

Azure was likely a factor in Microsoft’s stock initially struggling for gains in late trading despite a healthy earnings beat, as the declining growth rate for Azure has been a concern for analysts and investors. In the same quarter a year ago, Microsoft reported Azure growth of 76%, and followed that up with quarterly growth rates of 76% and 73%, but the rate dropped to 64% in the previous quarter and now has declined rapidly again. Most analysts projected Azure’s growth rate to again be in the low 60s as a percentage.

Microsoft’s legacy personal-computer business, a segment it calls “More Personal Computing,” reported revenue of $11.1 billion, better than the average analyst estimate of $10.9 billion. Overall PC sales have been exceeding projections this year as the end of support for Microsoft’s Windows 7 operating system approaches.

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Microsoft’s other reporting segment, “Productivity and Business Solutions” — which includes software such as the Office suite of products as well as LinkedIn and some other businesses — reported revenue of $11.1 billion, beating the average analyst estimate of $10.88 billion. LinkedIn revenue grew 25% in the fiscal first quarter, Microsoft reported.

Microsoft reported growth rates for 14 individual businesses in Wednesday’s report, and only one — the Surface PC business — reported a decline in revenue from a year ago, as Microsoft prepared to reveal a refreshed lineup of Surface products earlier this month. The Xbox gaming business was flat from a year ago ahead of the holiday season, while nine businesses reported growth rates in double-digit percentages.

Microsoft projected second-quarter revenue of $35.15 billion to $35.95 billion, with a breakdown of $11.3 billion to $11.5 billion for Productivity and Business solutions, $11.25 billion to $11.45 billion for Intelligent cloud and $12.6 billion to $13 billion for More Personal Computing.

“Overall OEM revenue growth should again be ahead of the PC market as we balance healthy Windows 10 demand and the benefit from the upcoming end of support for Windows 7 with the supply chains ability to meet this demand in Q2,” Chief Financial Officer Amy Hood said in a conference call.

The new Surface products are expected to drive revenue growth in that division to the low double-digits from last year, despite “strong” Surface sales in the year-ago quarter. Microsoft expects to struggle in gaming ahead of the expected launch of a new Xbox console next year, with Hood saying that Xbox revenue will “decline in the mid-20% range.”

Analysts on average project earnings of $1.27 a share on sales of $35.91 billion for the second quarter, according to FactSet.

Hood also said that Microsoft is maintaining its full-year forecast of double-digit percentage revenue gains, but is more optimistic about profit levels for the year.

”We continue to expect double-digit revenue and operating income growth driven by continued momentum in our commercial business,” Hood said. “Given our strong first-quarter results on the expected sales mix for the remainder of the year, we now expect operating margins to be up slightly year-over-year even as we continue to invest with significant ambition in high-growth areas.”