Microsoft, in its first quarter earnings call this morning, says the company may have passed the bottom of the economy.

"It's too early to tell, but the fourth quarter of [fiscal] 2009 [which ended June 30] may well have been the bottom of the economic reset," said Chief Financial Officer Chris Liddell.

Analysts were pleased with Microsoft's first-quarter performance for fiscal 2010 (ended Sept. 30), complimenting the company on the "nice quarter." It was the first positive earnings call the company has had in a long time. The stock is up about 6 percent since the market opened this morning to $28.28 per share.

With cost cutting of 10 percent year over year, Microsoft was able to beat analyst estimates with earnings per share of 40 cents, where many had been expecting about 32 cents. Adjusted for deferred Windows 7 revenue, earnings per share was 52 cents. Net income was $3.57 billion, an 18 percent decline from $4.37 billion a year ago.

The company said while sales fell, it was a positive result considering the overall macroeconomic environment. Sales were driven by Windows and Xbox, and came in at $12.92 billion in the first quarter of fiscal year 2010, a 14 percent decline compared with $15.06 billion in sales in the same period a year ago.

Sales were affected by the Windows 7 upgrade option Microsoft offered to customers who bought a PC before the operating system began selling on Thursday. The company has deferred that revenue, $1.47 billion. If the financial results had included those sales, the revenue would have been $14.39 billion.

Division results:

Windows and Windows Live (new name change, previously called "Client"):

Sales declined 4.4 percent to $4.09 billion. Operating income was $1.46 billion compared with $3.06 billion the same quarter a year ago.

Consumer demand for computers improved significantly, but business demand declined. Overall, the PC market growth was between zero and 2 percent.

Microsoft Business Division (Office, Sharepoint):

As a result of continued weak corporate spending, sales fell 11 percent to $4.4 billion. Operating income was down to $2.86 billion compared with $3.19 billion a year ago.

Consumer sales also declined. Office 2010 is coming out next year.

Server and Tools:

Sales were flat from the same period last year at $3.43 billion. Operating income went up to $1.28 billion from $1.04 billion a year ago.

Online Services Division (includes Bing and MSN):

Sales fell 3 percent to $490 million, attributable to changes in the foreign currency exchange; so it was basically flat. Bing's search revenue is up around 4 to 6 percent in the U.S. The division continues to lose money -- $480 million in the first quarter compared with $321 million a year ago.

Microsoft remains hopeful that the partnership with Yahoo will gain regulatory approval in early 2010.

Entertainment and Devices (Xbox, Xbox Live, mobile):

Sales were flat from same period a year ago at $1.89 billion. Operating income went up to $312 milllion from $159 million a year ago.

Attach rate, or sales of games per console, is 8.7 and 34 million consoles have been sold. "Halo 3" was No. 1 selling game in the U.S. in September. Xbox Live revenue increased by 50 percent.

For my Tweets during the company's conference call with analysts and media, go here.