The company posted fiscal second-quarter earnings excluding items of 76 cents per share, down from 78 cents a share in the year-earlier period.
Revenue increased 3 percent to $21.46 billion from $20.89 billion a year ago.
Analysts had expected the company to report earnings excluding items of 75 cents a share on $21.53 billion in revenue, according to a consensus estimate from Thomson Reuters.
Amid an increasingly competitive landscape, Microsoft has pinned its hopes for personal computer sales on the launch of its new Windows 8 system.
(Read more: Apple Is 'A Broken Company': Gundlach)
The results announced Thursday are the first to include Windows 8. The program is a dramatic overhaul of the Microsoft operating system that powers most PCs. Windows 8 came out Oct. 26 with slightly more than two months left in Microsoft's fiscal second quarter.
Although the Windows 8 sales haven't been as impressive as investors hoped, revenue in Microsoft's Windows division climbed 24 percent from the previous year.
So far, tech earnings results have been mixed. On Tuesday, IBM (IBM) earnings and revenue exceeded Wall Street's expectations while Apple (AAPL) fell short of revenue forecasts on Wednesday, sending the already bruised stock even lower in trading on Thursday.
- AP contributed to this report.
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