MICROSOFT REPORTED a slight drop in fiscal third-quarter profits as weaker sales for computers weighed down demand for its flagship Windows operating system.

The world’s largest software maker reported quarterly profits of $5.11 billion, or 60 cents per share. This compared with $5.23 billion, or 61 cents per share, in the year-ago quarter.

Sales rose 6 per cent to $17.41 billion.

Microsoft is relying on corporate demand for Office, teleconferencing and Windows 7 software, as well as server programs, to eke out revenue growth.

The company plans later this year to release Windows 8, the newest version of its operating system.

It is hoped this will help it to narrow Apple’s lead in tablet computers and reverse a sales decline in its Windows division.

Microsoft shares rose in extended trading after the report yesterday.

The stock had decreased less than 1 per cent to $31.01 at the close in New York.

It rose 24 per cent in the three months through to the end of March, the biggest quarterly increase since mid-2009, as investors grow more confident about the prospects for Windows 8.

The company gave its first look at operating-cost projections for the fiscal year that starts July 1st, saying that expenses would be $30.3 billion to $30.9 billion.

In the current year expenses will be $28.3 billion to $28.7 billion.

This is lower than a January forecast of $28.5 billion to $28.9 billion.

Expenses are under renewed scrutiny because Microsoft’s revenue growth is slowing.

Sales in the current fiscal year are expected to rise 6 per cent, according to analysts, compared with 12 per cent in fiscal 2011.

Figures reported last week showed pretax profits at Microsoft’s main Irish subsidiary fell by 58 per cent last year to €593 million.

This is despite an 18 per cent jump in revenues to €13.37 billion.

The company employs just over 1,000 staff at its facility in south Dublin. About 700 contract staff also work there.

Additional reporting: Reuters/Bloomberg