The software giant said that it earned $3.48 billion, or 35 cents a share, on revenue of $10.81 billion, for the three months ended Sept. 30. That compares with earnings of $3.14 billion, or 29 cents a share, on revenue of $9.74 billion for the same quarter a year ago. The year-ago earnings figure included legal expenses that amounted to 2 cents a share.
Microsoft said in June to expect revenue in the range of $10.6 billion to $10.8 billion, with per-share earnings between 30 cents and 32 cents.
"The solid revenue results for the quarter were at the top end of our expectations," Chief Financial Officer Chris Liddell said in a statement.
For the current quarter, Microsoft said to expect revenue of $11.8 billion to $12.4 billion and per share earnings of 22 cents to 24 cents. The outlook is affected by the fact Microsoft expects to defer $1.5 billion in revenue to account for a coupon program in which buyers of Office and Windows this holiday season will be able to upgrade to Office 2007 and Windows Vista when those products are released early next year. Microsoft said the revenue deferral will affect earnings in the quarter by about 11 cents a share.
Microsoft said earnings and sales were boosted by strong responses to the products that Microsoft has launched in recent months, including the Xbox 360 and SQL Server.
"We've had a really nice start to fiscal year 2007," Colleen Healy, Microsoft's general manager of investor relations, said in an interview. "Our businesses that had big product launches over the past 12 months were really the driver."