Microsoft reported a second quarter profit of $3.03 billion, 11 percent more than in the same period last year.
The world's biggest software company, which closed out its fourth fiscal quarter, said profits were dented by a reserve to repair or replace flawed Xbox gaming consoles, subtracting US$749 million from net profit.
Revenues for the three months to June 30 increased 13 percent to US$13.37 billion.
The increase was fueled by the introduction earlier this year of Vista, the latest version of the Windows system used on an overwhelming majority of personal computers worldwide, and the 2007 Microsoft Office software package for word processing and other functions.
Excluding special items, the profit amounted to 39 cents per share, in line with Wall Street forecasts.