Microsoft reported Friday that net profit fell 18 percent 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 dollars, or 52 cents per share, better than the 32 cents expected by analysts.

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

"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 percent to 28.71 dollars in pre-market trading.