Microsoft continues to be battered by the tough economy, reporting revenues of $13.65 billion today, a 6 percent decline from the same quarter a year ago. As expected, it was the first year-over-year quarterly revenue decrease in the company's history -- but it was even worse than the 2 percent reduction analysts had been anticipating.

That translated into profits of $2.98 billion, a 32 percent decline; and earnings per share of 33 cents, down 30 percent. However, the company said the results included 6 cents in special charges for employee severance costs and investment impairments. Without those charges, the company would have matched analyst estimates of 39 cents per share of earnings.

There was no announcement of additional layoffs beyond the up to 5,000 job cuts the company was already planning.

“While market conditions remained weak during the quarter, I was pleased with the organization’s ability to offset revenue pressures with the swift implementation of cost-savings initiatives,” said Chris Liddell, Microsoft's chief financial officer, in a news release. “We expect the weakness to continue through at least the next quarter.”

The company offered guidance on operating expenses -- putting them between $26.7 billion and $26.9 billion for the 2009 fiscal year. However, in another sign of the economic uncertainty, Microsoft continued to hold back on any revenue or earnings guidance.

In the key Client Division, which makes the Windows operating system for PCs, Microsoft reported a 16 percent decline in revenue, to $3.4 billion. Operating profits fell 19 percent, to $2.5 billion. The company cited continued weakness in PC sales, and a shift toward netbook PCs. The company makes less money from Windows on those small, Web-oriented computers than on traditional computers.

One bright spot among the divisions was Server & Tools, which makes Windows Server operating system and other programs used by companies. Revenue was $3.47 billion, up 7 percent -- exceeding Windows Client quarterly revenue for what appears to be the first time. Operating profits were $1.34 billion, up 24 percent. In its quarterly regulatory filing, the company credited factors including volume licensing revenue from the release of SQL Server 2008, which came out in the first quarter of the current fiscal year.

[Update: Joe Wilcox of Microsoft Watch has a detailed analysis of the Server & Tools and Windows results.]

Microsoft's Online Services Business suffered a 16 percent decline in advertising revenue, falling to $521 million. The company said that was primarily due to a decline in online display advertising. (The company was similar to Yahoo in that regard.) That contributed to a 14 percent decline in overall revenue in the division, which dropped to $721 million for the quarter. The operating loss in the division more than doubled, to $575 million.

The Entertainment & Devices Division, which includes the Xbox 360 and Zune, reported a 2 percent decline in revenue, to $1.57 billion. The division reported a loss of $31 million, compared with a profit of $106 million in the same quarter last year. A bright spot in terms of consumer demand: Microsoft said it shipped 1.7 million Xbox 360s in the quarter, compared with 1.3 million in the same quarter last year.

The division is also responsible for making Microsoft Office for Apple Macs. On that subject, an interesting tidbit from Microsoft's quarterly regulatory filing: "Sales of application software for Apple’s Macintosh computers declined 63%, reflecting the launch of Mac Office 2008 in the prior year as well as a decline in sales of Apple computers."

The Microsoft Business Division, which includes Office and related products, saw its revenue fall 5 percent, to $4.5 billion; and profits decline 8 percent, to $2.9 billion. The company blamed factors including weak demand for personal computers and software from businesses.

"I think it's going to continue to be relatively weak for the foreseeable future," Liddell said of the business PC market during a conference call with analysts. He said that will be "hopefully picking back up" by the time the company releases the next version of Office and related programs, scheduled for the first half of 2010.

Updated with divisional results since original post. More to come in subsequent posts. Also see the company's Form 10Q.

Follow-up: Microsoft: 10% jump in Windows preference, thanks to campaign