The sultan of software Microsoft stepped up after the close to release its quarterly report, and the shares of the Redmond, Washington-based company are trading higher in after-hours activity - last seen hovering near the 33.50 level. For the first quarter, MSFT reported that net income rose 23% to $4.29 billion, or 45 cents per share, up from $3.48 billion, or 35 cents per share, in the same quarter last year. Revenue jumped 27% to $13.76 billion from $10.81 billion last year. Analysts were looking for a profit of 39 cents per share.

The company also stated that it sees earnings for fiscal 2008 in a range between $1.78 and $1.81 per share on revenue of between $58.8 and $59.7 billion.

Pessimism in the options pits was high heading into the report, as MSFT's Schaeffer's put/call open interest ratio (SOIR) of 0.65 ranks above 94% of all those taken during the past year. With expectations apparently low among MSFT watchers, the stock could be in for a rally when the market opens tomorrow morning.