Software major Microsoft Corp has reported a negligible decline in net income to $6.62

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billion for the October-December quarter of 2011, even though demand for software and services remained high.

The company had posted a net income of $6.63 billion for the corresponding year-ago period, Microsoft said in a statement.

The company's revenue stood at $20.89 billion in the second quarter ended December 31, 2011, a 5% increase vis-a-vis the year-ago period.

Microsoft, which is struggling amid a weak PC market, has witnessed strong demand in the software and services segment and robust sales of its Xbox game console and Kinect motion controller.

"We delivered solid financial results, even as we prepare for a launch year that will accelerate many of our key products and services," company CEO Steve Ballmer said.

"Coming out of the Consumer Electronics Show, we're seeing very positive reviews for our new phones and PCs and a strong response to our new Metro style design that will unify consumer experiences across our phones, PCs, tablets, and television in 2012," he added.

Microsoft business division posted $6.28 billion in second quarter revenue, a 3% growth vis-a-vis the corresponding period a year ago.

Server and tools business accounted for $4.77 billion of second quarter revenue, an 11% increase in comparison to the previous year, reflecting double-digit revenue growth in Windows Server and SQL Server premium editions and more than 20% growth in system centre revenue.

In addition, online services segment revenue grew by 10% to $784 million, while revenues from Microsoft's entertainment and devices division rose by 15% to $4.24 billion.

There are now about 66 million Xbox 360 consoles in the market, along with 18 million Kinect sensors. Xbox Live memberships increased by 33% to 40 million in the reporting quarter.

In contrast, revenue from the Windows and Windows Live division dipped by 6% to $4.74 billion.

"We saw strong demand for our business products and services despite the soft PC market and continuing economic uncertainty in key parts of the world," Microsoft CFO Peter Klein said, adding, "We delivered record earnings per share by continuing to manage our costs while investing for future growth."

Looking ahead, Microsoft has revised downward its operating expense guidance to a range between $28.5 billion and $28.9 billion for the full year ending June 30.