As it has done in many previous quarters, Microsoft

(MSFT) - Get Report

beat Wall Street expectations in its quarterly earnings Tuesday but expressed concern about future revenue growth.

For the second quarter ended Dec. 31, the world's leading software company reported net income of $2.44 billion, or 44 cents a diluted share, on revenue of $6.11 billion. For the comparable quarter last year, the software company earned $2 billion, or 36 cents a diluted share, on revenue of $5.2 billion.

The earnings numbers include a 3-cent charge set aside for a settlement with

Caldera

, a software company that had sued Microsoft in 1996 for anticompetitive practices. Microsoft, which settled the suit Jan. 10, days before opening arguments were scheduled, had previously said it would take the charge in the current quarter, which ends March 31.

Analysts polled by

First Call/Thomson Financial

had predicted earnings of 42 cents a share. The analysts' predictions excluded the 3-cent charge, said Chuck Hill, director of research at First Call.

The second-quarter earnings were helped by strong product demand in Asia and sales of Office business software, despite lagging corporate demand surrounding the Y2K changeover, the company said.

Shares of the company's stock fell slightly to 115 in after-hours trading on

Instinet

immediately after the announcement. They had climbed 3 1/16, or 2.73%, in anticipation of the announcement.

"With the upcoming launch of Windows 2000 we are extremely excited to usher in a new era in personal and business computing," said John Connors, chief financial officer, in a statement. "However, we remain cautious in our expectations for near-term PC demand and corporate software spending, and continue to anticipate moderate revenue growth through the remainder of fiscal 2000."

Beating earnings expectations has become a standard exercise for the Redmond, Wash, company, which is the world's most valuable corporation in stock-market valuation.

The company turned in the kind of earnings management that Wall Street has come to expect, analysts said.

"Manage expectations and outperform," said Aaron Scott, analyst for

Advest

, which hasn't done underwriting for the company. (Scott rates the stock a buy) "You know the game. They'll say, 'Oh, things are bad going forward.' "

Stock prices typically climb immediately after earnings reports that beat the closely watched consensus expectations of Wall Street analysts.

The announcement came at a particularly tumultuous time for the company. Microsoft's stock priced wobbled up and down last week on rumors that the

Justice Department

and state attorneys general had agreed to demand that the company be split apart.

In the ongoing antitrust case against the company, Microsoft challenged the governent's proposed conclusions of law Tuesday, contending that it does not have monopoly power, did not unlawfully tie its Internet browser to the Windows operating system and does not have the power to control prices. Negotiators for the government and the company have been conferring privately, and the proceedings have repeatedly spawned stock-market jitters in recent months on settlement rumors.

Wall Street is closely watching initial information about the Windows 2000 operating system. Under development for three years, the software's release been delayed repeatedly, though it was released to manufacturers in December. The company now says it will release the system in February.

If all goes as planned, analysts said earnings from the operating system will begin to trickle in next quarter and explode in the first quarter next year, which will end in September.

The company last week named its longtime No. 2 executive,

Steve Ballmer

, to replace founder

Bill Gates

as CEO. Gates will remain as chairman and become "chief software architect," a new post.