Analysts surveyed by Thomson Reuters expected profit of 47 cents per share on $14.8 billion in revenue. Microsoft posted 48 cents per share.

Despite the numbers, Microsoft only posted a modest 1.9% increase in net income as compared to the same quarter a year ago. In the fiscal first quarter of 2008, revenue was $4.2 billion as compared to $4.3 billion in 2009.

Microsoft said its annuity sales, which are built mostly on multi-year software maintenance contracts, grew by more than 20% fueled by growth in the client, business and server and tools divisions.

Microsoft's success came mostly before the economic downturn that has had financial markets in a .

But the quarter was not without turmoil for Microsoft. During the quarter, Microsoft while pursuing Google in the search and advertising market. Microsoft is investing heavily to make up ground on the search giant but the depth of those efforts from a financial perspective won't be reflected until later in the fiscal year.