San Francisco  - Microsoft shares dropped over 5 per cent Thursday after the company reported disappointing earnings growth of 42 per cent in its fiscal fourth quarter.

The software giant said that income reached 4.3 billion dollars, or 46 cents a share, compared to analyst expectations of 47 cents a share. The rosy outlook was helped by a 1.06 billion dollar charge that Microsoft took in the year-ago quarter to fix problems on its Xbox 360 video game console.

Sales rose 18 per cent to 15.84 billion dollars from 13.4 billion last year, helped by strong sales of its Office and Windows. For the full year, sales rose surged 18 per cent to
60.4 billion dollars from 51.1 billion dollars last year.

"Delivering 60 billion dollars in annual revenue is an outstanding accomplishment and a testament to the powerful combination of great technology solutions and strong execution by our partners and global sales and marketing teams," said Kevin Turner, chief operating officer at Microsoft. (dpa)