Despite settling several lawsuits - most notably with Sun - and being fined by the European Union for abusing its monopoly, Microsoft is still in rude financial health, its results issued today have revealed.

Ignoring the $900 million (£495m) paid to Sun to end various patent issues, the $700 million (£385m) to resolve anti-trust issues with the company, the $350 million (£192m) as advance payment for using Sun technology and the 497.2 million euro (£332m) fine imposed by the EU, Microsoft actually beat analysts' expectations.

It reported a net income of $1.32 billion, or $0.12 per share, on revenue of $9.18 billion for the third quarter ended 31 March. That's a revenue increase of 14.6 percent but a net income fall of 38.3 percent.

Ignoring the fines etc, net income was 34 cents a share - higher than the expected 29 cents a share - so Microsoft seems to be doing something right. Or wrong depending on which way you look at it.

All of Microsoft's business segments met or exceeded the company's expectations, Microsoft CFO John Connors said. Overall corporate IT spending continues to improve and Microsoft expects healthy demand through the end of its fiscal year on June 30, he said.

As a result of its better-than-expected performance, Microsoft upped its forecast for its full 2004 fiscal year. The company now expects revenue to be between $37.8 billion and $38.2 billion. That is up from the previous, increased estimate of full-year revenue between $35.6 billion and $35.9 billion.

So if you want to know how to make money, abusing your market position and using your competitors' patents without permission for 10 years before paying the price, would appear to be the way forward.

Additional reporting by Joris Evers, IDG News Service