New York: Microsoft reported on Friday that net profit fell 18% in the first quarter of its fiscal year but the US software giant easily beat the expectations of Wall Street analysts.

The Redmond, Washington-based company, which released its next-generation computer operating system Windows 7 on Thursday, said net profit declined to $3.57 billion, or 52 cents per share, better than the 32 cents expected by analysts.

Revenue declined 14% in the quarter which ended 30 September to $12.92 billion compared with the same period a year ago, better than the analysts’ forecasts of $12.37 billion.

“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Microsoft chief financial officer Chris Liddell.

“We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”

Microsoft’s earnings capped a busy week for the company during which it released Windows 7 and also announced a deal with Twitter to integrate messages from the micro-blogging service into its new search engine Bing.

Shares in Microsoft gained 7.97% to $28.71 in pre-market trading.