According to its quarterly report, Microsoft (MSFT  ) came out ahead for the first quarter of its 2021 fiscal year, beating revenue and EPS estimates. The company's soft guidance going forward caused some trepidation during trading, however.

Microsoft's earnings report was fairly promising, beating expectations despite the ongoing Coronavirus pandemic. Revenue was up 12%, reflecting an increase to $37.15 billion from $33.1 billion, versus expectations of $35.72 billion. Earnings per share was up a respectable 32%, a rise from $1.38 to $1.82, against expectations of $1.54. Net income was up 30% at $13.9 billion, while operating income was up by 25% at $15.9 billion.

According to the report, Microsoft Office Consumer and Commercial products (including cloud services, respectively) experienced a sizable bump in growth, likely helped by the move to telecommuting caused by the ongoing pandemic. Office Commercial products experienced a 21% growth for the quarter while consumer products were up 13%. Microsoft's cloud division was up 20%, thanks to the success of products such as Azure and GitHub.

"Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31% year over year," said Vice President and CFO of Microsoft Amy Hood. "We continue to invest against the significant opportunity ahead of us to drive long-term growth."

The standout from the otherwise promising quarterly report was a decline in search and advertising sales. Microsoft experienced two consecutive decreases in search and advertising revenue, with a reported 18% drop in June amid the pandemic. Guidance for search and advertising sales wasn't particularly promising either, with Hood commenting that "we expect revenue to decline in the mid to high-single-digit range" for the division.

If there was any effect on Microsoft's stock caused by the report, it was easy to miss. Microsoft's announcement after market close on Tuesday came amid a volatile market that was marred by another day of poor performance. Major indices were down for another consecutive day as pandemic uncertainties wreak havoc on the global economy.