Microsoft Keeps on Keepin' on

Although Microsoft's (NAS: MSFT) earnings aren't as exciting as Apple's (NAS: AAPL) earnings, the company shows that it still knows how to break out with a record quarter when it's crunch time.

The Redmond giant reported a record $17.4 billion in revenue for the third quarter, a 7% rise that translated into $0.68 of earnings per share. Top-line revenue bested the consensus estimate of $17.2 billion while bottom-line earnings were right on target. Sales were bolstered by strong sales of the company's flagship Office offering and Windows sales ticked up slightly.

Windows and Windows Live inched up 2% in lockstep with the PC market, and Windows 7 licenses have reached a cumulative total of 450 million licenses sold. Microsoft's revenue for its productivity server offerings -- which includes Lync, SharePoint, and Exchange -- jumped by double-digits, while the server and tools segment posted a 10% increase year over year.

During the quarter, the company closed its acquisition of Skype, began rolling out its Windows Phone 7.5 Mango update, and unveiled Windows 8 at its BUILD developer conference. The Xbox scored a ninth consecutive month of being the top-selling game console domestically, besting Sony's (NYS: SNE) PlayStation 3.

Bing's organic U.S. market share increased to 14.7% and Bing-powered U.S. market share, including Yahoo! (NAS: YHOO) sites, was in the ballpark of 27%. It still lags Google's (NAS: GOOG) almost two-thirds share. Bing is part of the online services division, which continues to shed dollars, generating an operating loss of $494 million. This is actually an improvement as the unit's loss begins to narrow.

Mr. Softy also bumped its dividend during the quarter by a healthy 25%, increasing it to $0.20 per share for the quarter, to the cheers of Microsoft dividend lovers. At the current levels, the company is handing out an annual yield near 3%.

No one really expects blowout quarters from Microsoft anymore, but the company still has what it takes to churn out consistent free cash flow -- $25.1 billion over the past twelve months. If you like rock-solid dividend stocks, then Microsoft is a candidate for your portfolio, along with these 11 stocks.

At the time this article was published Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Microsoft, Apple, Google, and Yahoo!. Motley Fool newsletter services have recommended buying shares of Apple, Yahoo, Google, and Microsoft, as well as creating a bull call spread position in Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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