Sales for the most recent quarter rose to $16.43 billion, up from $14.5 billion last year, thanks to strong sales of Office and Xbox game system.
Microsoft has sold a record-breaking 350 million licenses for its Windows 7 operating system since launching it 18 months ago, but demand appears to be waning in an uncertain economy.
The company was seen earning 56 cents a share on revenue of $16.19 billion, according to a consensus estimate from Thomson Reuters.
Microsoft added that it sees 2012 operating expense up 3 to 5 percent from its 2011 guidance.
Shares of Microsoft slipped almost 2 percent after edging higher in extended trading Thursday. Get Real-Time Quotes for Microsoft
The shares closed at $26.72 in the regular New York Stock Exchange session. Volume exceeded 71 million shares before the closing bell.
"We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses," said Peter Klein, CFO of Microsoft, in a prepared statement. "Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications."
However, Investors fear that new gadgets, led by Apple's iPad, are the thin end of the wedge that will one day separate Microsoft from its core customers.