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NEW YORK (TheStreet) -- Microsoft (MSFT) led the S&P 500 into all-time-high territory on Friday after it beat analyst expectations on earnings. Shares were surging 6.4% to $35.88 in afternoon trading. The S&P was gained 0.3% to 1,756.82 to extend its 2013 advance to  24%.

Seattle-based Microsoft reported first-quarter earnings of 62 cents a share, over 53 cents a share in the year-ago quarter. Revenue was 16% higher to $18.53 billion.

Analysts surveyed by Thomson Reuters had anticipated earnings of 54 cents a share on $17.79 billion in revenue. Expectations for the quarter had been conservative as investors dealt with uncertainty over management's succession plan and an expensive acquisition of Nokia's mobile arm.

The main source of growth, Microsoft's commercial segment -- which houses Office software licenses and enterprise-level sales -- posted a 10% year-on-year revenue increase to total $11.2 billion. Within the segment, commercial cloud revenue grew 103%. The Devices and Consumer segment grew 4% to $7.46 billion.

"We saw strong focus across our teams, generating record first-quarter revenue even as we navigate a fundamental business transition. Our enterprise renewals were very healthy and our devices and consumer business continued to improve," said CFO Amy Hood in a statement.

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For the second quarter, the company anticipates revenue between $23.1 billion to $24.1 billion, more than analysts' prediction of $22.9 billion. In the Devices and Consumer segment, management expects revenue of $5.2 billion to $5.4 billion. Hardware sales are expected to climb 35% to 45%, boosted by the expanded Surface line and Xbox One launch.

For Commercial, Microsoft predicts revenue of between $10.7 billion to $10.9 billion, representing 9% to 11% in year-on-year growth.

"As we look forward to the second quarter, our enterprise business will remain strong and we are also set up for a fantastic holiday season with Surface, Xbox One and a host of devices from our partners, which will allow us to reach new customers and drive increased engagement," said Hood during a conference call.

TheStreet Ratings team rates Microsoft Corp as a Buy with a ratings score of A-. The team has this to say about their recommendation:

"We rate Microsoft Corp (MSFT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."