Although Microsoft‘s (Nasdaq: MSFT) earnings aren’t as exciting as Apple‘s (Nasdaq: AAPL) earnings, the company shows that it still knows how to break out with a record quarter when it’s crunch time.

The Redmond, Washington giant recently reported a record $17.4 billion in revenue for the third quarter, a 7% rise that translated into $0.68 of earnings per share. Top-line revenue bested the consensus estimate of $17.2 billion while bottom-line earnings were right on target.

Sales were bolstered by strong sales of the company’s flagship Office offering and Windows sales ticked up slightly.

Windows and Windows Live inched up 2% in lockstep with the PC market, and Windows 7 licenses have reached a cumulative total of 450 million licenses sold. Microsoft’s revenue for its productivity server offerings — which includes Lync, SharePoint, and Exchange — jumped by double-digits, while the server and tools segment posted a 10% increase year over year.

During the quarter, the company closed its acquisition of Skype, began rolling out its Windows Phone 7.5 Mango update, and unveiled Windows 8 at its BUILD developer conference. The Xbox scored a ninth consecutive month of being the top-selling game console domestically, besting Sony‘s (NYSE: SNE) PlayStation 3.

Bing’s organic U.S. market share increased to 14.7% and Bing-powered U.S. market share, including Yahoo! (Nasdaq: YHOO) sites, was in the ballpark of 27%. It still lags Google‘s (Nasdaq: GOOG) almost two-thirds share. Bing is part of the online services division, which continues to shed dollars, generating an operating loss of $494 million. This is actually an improvement as the unit’s loss begins to narrow.

Mr. Softy also bumped its dividend during the quarter by a healthy 25%, increasing it to $0.20 per share for the quarter, to the cheers of Microsoft dividend lovers. At the current levels, the company is handing out an annual yield near 3%.

No one really expects blowout quarters from Microsoft anymore, but the company still has what it takes to churn out consistent free cash flow — $25.1 billion over the past twelve months

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