Microsoft on Thursday reported a year-on-year profit decline of nearly 24 per cent in the fiscal fourth quarter of 2006 due partly to a one-time legal charge, and announced a $40 billion stock repurchase plan.

The company reported net income for the quarter of $2.83 billion sharply off the $3.7 billion the company reported in the fiscal fourth quarter of 2005. The $2.83 billion included a legal charge of 3 cents a share. Without the charge, Microsoft said earnings would have been 31 cents per share for the most recent quarter, exceeding Wall Street estimates of 30 cents per share.

For the 2006 fiscal year, Microsoft reported $12.6 billion in net income as compared to $12.25 billion in the previous year, an increase of 2.8 per cent. Revenue was up 11 per cent over fiscal 2005 to $44.28 billion.

Microsoft set a company revenue record for a fourth quarter at $11.8 billion. That mark was a 16 per cent increase over the same quarter in 2005.

The company also announced it would repurchase $20 billion of its stock before August 17 and another $20 billion before June 30, 2011. In addition, the company again realigned its financial reporting structure, which will have five operating segments in fiscal 2007: Client, Server and Tools, Information Worker, Online Services Group, Microsoft Business Division, and Microsoft Entertainment and Devices Division. The groups align with the three organisational groups Microsoft recently created: Microsoft Platforms and Services Division, Microsoft Business Division, and Microsoft Entertainment and Devices Division.