Updated from 5:53 p.m. EST

SAN FRANCISCO -- Microsoft ( MSFT) topped second-quarter revenue and earnings estimates Thursday and boosted full-year guidance.

The Redmond, Wash., software company posted revenue of $16.4 billion, up 30% from $12.5 billion in the prior year's quarter. Analysts were expecting a top line of $15.95 billion, according to Thomson Financial.

Net income rose 81% year over year to $4.7 billion, or 50 cents a share. A year ago, the company posted a profit of $2.6 billion, or 22 cents a share.

Analysts were looking for 46 cents a share.

Results in the prior year were lowered by the deferral of $1.64 billion of revenue to later quarters, according to the company. Adjusting for the deferral, revenue in the most recent quarter grew 30%, operating income was up 27% and EPS gained 32%. No comparable deferral is expected in the current quarter, according to the company.

Shares of Microsoft were up $1.58, or 4.7%, to $34.83 in recent after-hours trading; the stock had already surged 4% in Thursday's regular session.

Microsoft said third-quarter revenue would range from $14.3 billion to $14.6 billion and EPS would be 43 cents to 45 cents. The Street was expecting a top line of $14.4 billion and EPS of 44 cents.

The company boosted full-year revenue guidance to a range from $59.9 billion to $60.5 billion, from a prior projection for $58.8 billion to $59.7 billion. EPS will now be $1.85 to $1.88, from prior guidance for $1.79 to $1.82. Analysts were expecting a top line of $59.4 billion and EPS of $1.81.

"We raised revenue guidance by $700 million to $1 billion, to include the beat in the second quarter, Chief Accounting Officer Frank Brod said in an interview. The boost is due to strong sales across product lines, he added.

"We're seeing strong demand for products in the consumer segment," and IT spending by corporations continues to be healthy. The 7-cent-a-share increase in full-year EPS guidance includes 3 cents above prior projections for the second half of the fiscal year.

Client revenue, which includes sales of the Vista operating system, grew 68%, to $4.3 billion. Business software rose 37%, to $4.8 billion. The server and tools division posted a 15% gain to $3.3 billion.

"We saw strength with the new Office and Vista annuity sales" to businesses, Brod said. Such sales are multi-year agreements. Unearned revenue for Microsoft's client, Office, and server and tools software grew $600 million during the quarter, bringing the balance to $12.2 billion, Brod said.

Revenue at the unprofitable online services business was up 38% to $863 million.

Entertainment and Devices revenue rose 3%, to $3.1 billion. The division was profitable for its second consecutive quarter, largely on the sales of 17.7 million Xbox consoles and an average of seven games per box, Brod said. Seven Microsoft game titles sold more than 1 million copies each.

Even with Xbox price reductions, Microsoft now earns money on the console, Brod said. It had in the past been sold at a loss.

Operating margin increased four points, to 40%, CFO Chris Liddell said on a conference call.

Over 60% of sales are now outside the U.S., helping insulate the company from any downturn in the domestic market, Liddell said. Growth outside the American market was 20%, and Microsoft revenue in the surging economies of Brazil, Russia, India and China grew at a combined rate of 65%.

Even inside the domestic market, growth was 15% in the quarter. "You have to look really hard to find any weakness in our results," Liddell said.

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