Microsoft's revenue totaled $14.45 billion in 1Q08, up slightly from $14.40 billion in 1Q07. Diluted earnings per share were at $0.47, down from $0.50 reported the same time last year. But EPC included a fee of $0.15 per share, a fine from the European Commission for failure to comply with an antitrust ruling.

Operating income was down from 1Q07's $6.59 billion, totaling just $4.41 billion this year, including a charge of $1.42 billion for the European Commission, reports PC World.

The company reported revenue of $843 million from online services, the division housing its ad units. The figure marks a 40 percent increase from 2007's first quarter revenue of $603 million, but Microsoft lost $228 million on the total, reports The New York Times. It also rode a one-time lift from the inclusion of results from aQuantive, which it bought last year for $6 billion.

High demand for the Xbox 360 brought Microsoft a 68 percent revenue increase in entertainment and devices, compared to Q1 of last year. Cumulative console sales crossed the 19 million mark in Q1, an increase of 74 percent from last year.

Servers and tools increased 18 percent, following launches for Windows Server 2008, SQL Server 2008 and Visual Studio 2008.

Fiscal expectations for 2008 at large represent a more optimistic outlook, with a forecast of $66.9-$68 billion, revised from $59.9-$60.5 billion. Operating income expectations were revised to fall between $26.7-$27.4 billion instead of $24.2-$24.4 billion.

Review the Microsoft earnings report.