Microsoft tops forecasts with 14% rise in revenues

MICROSOFT has posted a bigger-than-expected quarterly profit, boosted by strong sales of its software and services for businesses, a solid festive season for its new Xbox game console and Surface tablets, and a slightly lower tax bill.

The Xbox One was among Microsoft's launches this year. Picture: AP

The world’s largest software company did not say anything about its five-month search for a new chief executive to replace Steve Ballmer, who said in August he would retire within a year.

The company co-founded by Bill Gates 39 years ago was central to the personal computer revolution, and its Windows and Office products still dominate business desktops, but it lost its way with consumers in the last decade under Ballmer as Apple and Google stormed ahead in mobile computing.

The quarter may well be the last full one for Ballmer, and it at least showed some positive momentum for the Surface tablet, Microsoft’s long-delayed attempt to knock Apple’s iPad off its perch.

Colin Gillis, an analyst at BGC Financial, said: “It’s a good print to ride off into the sunset with, for the current CEO. There’s still the over-arching question for this company: who’s going to be the new CEO, and what direction they take.”

Sources have said the search is down to a handful of candidates, including internal and external executives.

The Xbox One console, launched in November, helped the top line, contributing more than half to the 7.4 million unit sales in the quarter, up from 5.9 million a year ago.

Overall, Microsoft reported a financial second-quarter profit of $6.56 billion (£3.97bn), or 78 cents per share, compared with $6.38bn, or 76 cents per share, in the year-ago quarter. That easily beat Wall Street’s average estimate of 68 cents.