Microsoft Revenue: New Vista

Updated from 4:38 p.m. EDT

Despite a $1.06 billion charge, Microsoft(MSFT) followed up its previous earnings blast with a solid fourth quarter.

The Redmond, Wash.-based software giant said Thursday that revenue grew to $13.37 billion, a 13% increase from a year earlier, and ahead of analysts' expectations of $13.27 billion.

Including the massive 8-cent-a-share charge for Xbox 360 warranty coverage, the company's net income rose to $3.04 billion, or 31 cents a share, from $2.83 billion, or 28 cents a share, a year earlier.

Excluding the charge, EPS of 39 cents met Street estimates.

As predicted, strong PC sales of an estimated 11% to 13% boosted growth in revenue for the Vista operating system. Strength of that product's introduction had pushed Microsoft's third-quarter EPS in the earlier quarter.

Investors may have been hoping for better momentum; shares of Microsoft were recently off 66 cents, or 2.1%, to $30.85.

Looking ahead, the company projected revenue of $12.4 billion to $12.6 billion for the current quarter. EPS will be between 38 cents and 40 cents. Analysts had predicted $12.5 billion in revenue and EPS of 38 cents, less items.

"We are raising guidance by $300 million and raising [EPS guidance] by a penny on the low and high end," senior finance manager Charly Tracy said in an interview.