Microsoft tops Q2 earnings expectations, still no new CEO

Company's earnings beat Wall Street's expectations, but CEO guessing game about Steve Ballmer replacement continues.

Charles Cooper Former Executive Editor / News
Charles Cooper was an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet.
Charles Cooper
2 min read
Microsoft retail store in Toronto. Getty Images

This may turn out to be the first earnings report where Microsoft's actual financial results are a sideshow to the main event.

Microsoft reported fiscal second-quarter results Thursday that were better than expected. The company had sales of $24.5 billion and 78 cents per share. Wall Street had expected revenue of $23.7 billion with a profit of 68 cents a share.

But the bigger news -- who will replace Steve Ballmer as the company's next chief executive? -- remains in the realm of a press release, at least for the foreseeable future. The company had nothing to say in its earnings statement about progress in its search for a new CEO, which began after Ballmer last August announcedhis intentions to step down sometime within the following 12 months. For what it's worth, I'm again hearing rumblings that an announcement may be in the offing -- perhaps as early as next week -- but we've heard that before so take that one with the proverbial grain of salt.

Responding to the earnings report, Microsoft shares soared in after-hours trading. The highlights of the recently concluded quarter included:

  • Windows OEM revenue: Down 3 percent, reflecting what the company described as "continuing softness" in the consumer PC business. At the same time, Windows OEM Pro revenue climbed 12 percent.
  • Surface revenue: $893 million, up from $400 million in the first quarter.
  • Xbox unit sales: 7.4 million units.
  • Bing: Revenue up 34 percent.
  • Commercial revenue: Up 10 percent to $12.67 billion.

Microsoft, which is hosting an analyst call this afternoon to discuss the results, said it would provide forward-looking guidance in connection with the quarterly earnings announcement on its earnings conference call.