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Microsoft’s Xbox, Office and Windows Server businesses helped the company overcome a down quarter for the Windows PC market. The company just posted revenue of $16.43 billion for the quarter ended March 31 (up 13%), and profits of 61 cents per share (up 36%) — topping Wall Street’s expectations on both counts.

The company also gave the first hint of the financial impact to come from the across-the-board compensation increases announced last week by Microsoft CEO Steve Ballmer for the next fiscal year. Operating expenses are projected to rise by about 3 percent to 5 percent, to at least $28 billion, in fiscal 2012, which begins in June.

Despite Microsoft posting higher profits than expected, $5.23 billion in net income, Apple was more profitable for the quarter — posting $5.99 billion in net income in its recent report. That’s a first, and a sign of Apple’s ongoing rise on the wings of the iPad and iPhone. [Update: My mistake, it’s not a first — it last happened in 1991. (Thanks, Charles.)]

Microsoft’s Entertainment & Devices Division continued to  benefit from the Kinect motion sensor for the Xbox 360, which has also been helping to drive sales of the game console. The company shipped 2.7 million Xbox 360s during the quarter, up from 1.5 million in the same quarter a year ago, according to its quarterly filing with the SEC. Total Kinect shipments were 2.4 million for the quarter.

Revenue in the E&D Division rose 60 percent, to $1.9 billion. Profits were up 50 percent, to $225 million.

The slump in the Windows business had been expected, after recent research data showed a decline in PC shipments for the quarter. Revenue in the Windows & Windows Live Division was down 4 percent, to $4.4 billion, and profits slumped 10 percent, to $2.8 billion.

In its quarterly filing, Microsoft indicated that the consumer PC market was the primary culprit for the decline — pointing in particular to a 40 percent decline in netbook sales in the consumer market. That’s more evidence of the iPad’s impact on the market. Many consumers are opting for the Apple slate rather than Windows-based netbooks to fill the gap between the PC and the phone.

The Microsoft Business Division was helped by strong sales of Microsoft Office 2010. Revenue was up 21 percent, to $5.3 billion, and profits were up 25 percent, to $3.1 billion. The comparison to the prior results was boosted by a $305 million deferral of revenue from the same quarter a year ago, due to Office upgrade promotions that were run at the time.

In the company’s Online Services Division, revenue rose 14 percent, to $648 million, but the loss widened to a whopping $726 million for the quarter. Microsoft credited strong online advertising revenue for the increase in the top line, and blamed the larger loss on costs associated with its Yahoo partnership and efforts to acquire new online traffic.

Revenue climbed 11 percent in the stalwart Server & Tools business, to $4.1 billion, and profits rose 12 percent, to $1.4 billion. Microsoft credited Windows Server, SQL Server and Enterprise Client Access License Suites.

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