Microsoft Earnings Top Estimates; Shares Rise

Microsoft reported quarterly earnings that were slightly lower than a year ago but beat Wall Street's expectations. Sharesrose in extended-hours trading.

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The software giant posted fiscal third-quarter earnings excluding items of 60cents per share,down from 61 cents a share in the year-earlier period.

Net income was $5.1 billion, or 60 cents per share, down from $5.2 billion, or 61 cents, in the year-ago quarter when it posted a one-time tax gain.

Revenue was $17.4 billion, a 6-percentincrease from $16.43 billion a year ago.

Analysts had expected the company to report earnings excluding items of 57 cents a share on $17.18 billion in revenue, according to Thomson Reuters.

After the earnings announcement, the company's shares rose 2 percent in trading after the closing bell.(Click here to get the latest quote for Microsoft.)

The 6-percent increase in sales at the company was driven by strong demand for its server software products and Office application.

Worldwide personal computer sales rose a modest 1.9 percent in the quarter, according to tech research firm Gartner. That was better than expected in a market facing hard-drive shortages from Thailand and the onslaught of Apple's iPad, but still showed weakness from the key U.S. consumer market.

"It looks good. Particularly good was the Windows business, which grew about 4 percent, more than PC industry growth," said Brendan Barnicle, an analyst at Pacific Crest Securities. "In the last few quarters, Windows has been growing less than PCs overall."

The company's earnings report comes after a down day for tech stocks. IBM , Intel and Qualcomm all fell in trading on Thursday. Despite some tech earnings disappointments, the sector is likely to remain a favorite for many investors due to expected growth, innovation potential and the group's strong cash potential.

Microsoft stock is up 20 percent so far this year, outpacing the tech-heavy Nasdaq's 16 percent gain, and a 10 percent rise in the Standard & Poor's 500.