SAN FRANCISCO - Microsoft on Thursday reported that its latest quarterly earnings sagged 29 per cent as revenues were dragged down by a weak global computer market.

Microsoft said its net profit for the quarter ending June 30 was US$3.05 billion (S$43.37 billion), or 34 cents per share of stock, in what amounted to a 29 per cent drop from the same period last year.

"Our business continued to be negatively impacted by weakness in the global PC and server markets," said Microsoft chief financial officer Chris Liddell.

"In light of that environment, it was an excellent achievement to deliver over 750 million dollars of operational savings compared to the prior year quarter."

Microsoft reported that its revenue in the recently-ended quarter dropped 17 percent to 13.1 billion dollars as compared to the same three months in 2008.

Microsoft stock's price quickly slid more than eight percent to 23.47 dollars in after-hours trading following the release of the earnings figures.

The quarter marked the end of Microsoft's fiscal year and the US software giant reported that its annual profit dropped 18 percent from the prior year to 14.57 billion dollars, or 1.62 dollars per share of stock.

Revenue for the year was 58.44 billion dollars, a three percent dip from the previous year, according to Microsoft.

"While economic conditions presented challenges this year, we maintained our focus on delivering customer satisfaction and providing solutions to our customers to save money," said Microsoft chief operating officer Kevin Turner.

"I am very excited by the wave of product and services innovations being delivered in this next fiscal year."

On Wednesday a finished version of Microsoft's next-generation operating system Windows 7 was made available to electronics makers for installation on new computers and other "smart" hardware.

Windows 7 is to be publically released on October 22.

Microsoft has also released Windows Server 2008 software to makers of business computer servers. -AFP