Microsoft has reported a further increase in revenue and profits for its latest quarter, but fallen short of market expectations.

The software giant earned $2.56 billion in its quarter ending 31 March 31, compared to $1.32 billion a year ago.

Legal costs pushed earnings down, but by less than a third that this did this time last year. Charges for stock-based compensation for Microsoft employees also ate into the figures. Without these two, Microsoft was in line with analyst expectations.

Last year's third quarter included $2.53 billion in charges related to a settlement with Sun and the European Commission fine. This year, the legal charges amounted to $768 million, which included settlements with Gateway, and a payment to Sun.