Microsoft's Entertainment and Online Segments Outperform

Microsoft's Kinect for Xbox 360

The software giant says it earned $5.7 billion in its fiscal first quarter on $17.4 billion revenue.

Microsoft on Thursday reported that revenue rose 7 percent in its fiscal first quarter to $17.4 billion, while net income grew 6 percent to $5.7 billion.

Revenue at the software company's entertainment and devices division grew 9 percent to $2 billion, but operating income there fell 9 percent to $352 million. Microsoft's online services division experienced 19 percent revenue growth to $625 million, though the unit lost $494 million compared with a loss of $558 million a year ago.

Microsoft said that Bing's share of the U.S. Internet search market grew 350 basis points to 14.7 percent. 

Xbox, the company said Thursday, was the top-selling gaming console in the U.S. for a ninth consecutive month. Microsoft launched the Gears of War 3 video game during the quarter, and 3 million copies sold in the first month.

The company recently announced plans to roll out by the end of the year its next-generation of TV entertainment on Xbox Live, which includes three dozen content partners.

Another highlight during the quarter was the completion of Microsoft's purchase of Skype.