The world's largest software maker, whose shares rose 1.4 percent in after-hours trading, reported net profit of $6.7 billion, or 74 cents per share, for its fiscal second quarter, versus $4.2 billion, or 47 cents per share, a year ago.
Excluding the effects of deferred revenue from pre-sales of Windows 7 to PC makers and retailers, and its free upgrade program, Microsoft reported profit of 60 cents per share.
We didn't see enterprise spending growth in our fiscal second quarter just ended, Chief Financial Officer Peter Klein told Reuters. However, our general view is a recovery will occur starting this calendar year and gradually over the next several years.
Revenue rose 14 percent to $19.02 billion, including $1.71 billion of deferred revenue from the Windows 7 launch in October. Excluding that, sales were $17.31 billion.
Windows 7 has proved to be Microsoft's strongest-selling operating system to date after the disappointing Vista.
Jane Snorek, technology analyst at First American Funds, said the results were better than expected, but noted the relatively modest share reaction.
Last year the stock was a big outperformer. A lot of people think the stock has already had its run, said Snorek. But I think with PCs doing this well and a new Office coming in June, that the stock can still outperform. I think Office can be a big hit.
Microsoft shares rose to $29.57 in after-hours trading from their Nasdaq close of $29.16.
Rivals International Business Machines Corp
Microsoft stopped making specific profit or revenue forecasts in January 2009, citing market volatility.
(Reporting by Bill Rigby; Editing by Richard Chang and Tiffany Wu)