Microsoft Corporation (MSFT) beat the Wall Street’s quarterly profit and revenue forecasts supported by heavy sales of its office and server software to business, increasing its shares by more than 5 percent after hours.

Numbers beat the estimates

Revenue for the quarter was up 16 percent to $18.5 billion versus analyst’s estimates of $17.8 billion, backed by rising sales of its Office software. In total, for the fiscal first quarter, Microsoft reported 17 percent increase in profit to $5.2 billion, or 62 cents per share, up from $4.5 billion, or 53 cents per share, for the same quarter last year. This beat the Wall Street estimate of 54 cents.

However, the profit targets for Microsoft were lowered by the analysts over the past three months, distressed by the start of ambitious reorganization by retiring Chief Executive Steve Ballmer and the pricey acquisition of Nokia’s handset business, even the company’s market for core personal computer dropped.

For the second quarter company expects revenue of $23.1 billion to $24.1 billion, ahead of analysts’ average forecast of $22.9 billion.

Segment wise results

The company now has two main groups, one covering its devices and consumer business, and other commercial business.

The commercial side had a strong growth in the quarter posting a 10 percent increase in revenue mainly due to selling of office and server software to businesses. The revenue of consumer and hardware group gave a moderate increase of 4 percent, which was held back by poor sales of windows system.

PC sales may stabilize

According to industry research firm Gartner, PC shipments dropped 8.6 percent in the previous quarter, indicating a trend towards tablet benefiting Apple Inc and Google Inc, but disappointing traditional PC makers like Microsoft and Intel Corp.

PC sales are on the decrease from the last 18 months, moreover, Microsoft Chief Financial Officer Amy Hood told on Thursday that there are ”signs of stabilization”.

Sales of Windows software to PC makers like Hewlett-Packard Co, Lenovo Group and Dell Inc, dropped by 7 percent in the quarter.

Microsoft told that the sale of its Surface tablet surge to $400 million due to more interest in smaller and largely discounted Surface RT model.

Microsoft shares increased to $35.60 after in hours of trading, after closing at $33.72 on NASDAQ, prior to the announcement of profit figures. The shares were up 21 percent over last 12 months, in comparison to a 24 percent gain o of Standard & Poor’s 500.