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UPDATE 2-Microsoft profit beats Wall Street, no word on new CEO

Bill Rigby
Thursday, 23 Jan 2014 | 5:15 PM ET

SEATTLE, Jan 23 (Reuters) - Microsoft Corp posted a bigger-than-expected quarterly profit on Thursday, boosted by strong sales of its Office software to businesses, a solid holiday season for its new Xbox game console and Surface tablets, and a slightly lower tax bill.

The world's largest software company did not say anything about its unexpectedly long 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 PC revolution, but lost its way in the last decade under Ballmer as Apple Inc and Google Inc 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.

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

Microsoft reported a fiscal second-quarter profit of $6.56 billion, or 78 cents per share, compared with $6.38 billion, or 76 cents per share, in the year-ago quarter.

That easily beat Wall Street's average estimate of 68 cents, according to Thomson Reuters I/B/E/S.

Microsoft shares jumped 3.4 percent in after hours trading.

Overall sales rose 14 percent to $24.5 billion, helped by higher sales of Office, its Xbox game console and new Surface tablets, also beating Wall Street's forecast of $23.7 billion.

Over the last few months analysts slightly raised revenue estimates, but reduced them for net income.

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