Microsoft reported first- quarter sales and profit that exceeded analysts' projections as the company, which is looking for a replacement for chief executive officer Steve Ballmer, relied on corporate software demand to make up for weak consumer personal computer purchases.

Net income in the period that ended September 30th rose to $5.24 billion from $4.47 billion, or 53 cents, a year earlier. Sales climbed 16 per cent to $18.5 billion.

The world’s largest software maker is undergoing unprecedented changes, conducting its first CEO search and starting a major organisational overhaul aimed at bolstering sales by focusing on devices and services.

Demand for Microsoft’s Office productivity software has helped compensate for declining consumer purchases of PCs running Windows, and the company has been cutting costs to shore up profit.

"Business has been driving the train," said Colin Gillis, an analyst at BGC Partners LP in New York, who recommends holding the shares. "Most people are really looking through the quarter to the new CEO."

Microsoft shares rose as high as $36.20 in extended trading following the report. – (Bloomberg)