Microsoft posted a 65 percent rise in quarterly profit Thursday, topping Wall Street estimates due to better-than-expected demand for its new Windows Vista operating system. Shares of Microsoft rose 5 percent after the announcement, in which the world's biggest software company also forecast 2008 profit at the mid-point of a range of analyst estimates. "The strength of Vista is really driving this," said Kim Caughey, analyst at Fort Pitt Capital Group. She added that the company had set "manageable expectations for the full year 2008, which generally allows them some headroom." Microsoft posted a net profit of $4.93 billion, or 50 cents per diluted share, in its fiscal third quarter ended March 31 versus a profit of $2.98 billion, or 29 cents per share, in the year-ago period. Excluding tax benefits and a legal charge, Microsoft earned 49 cents per share, beating the average analyst forecast of 46 cents, according to Reuters Estimates. Revenue rose 32 percent to $14.4 billion. Analysts, on average, had forecast revenue of $13.89 billion, with estimates ranging from $13.73 billion to $14.09 billion, according to Reuters Estimates. Microsoft deferred about $1.7 billion in revenue from its second quarter to its third quarter to account for upgrade coupons given to customers prior to the January launch of Vista and Office 2007. Microsoft expects the latest versions of its two flagship products to underpin profit growth over the next few years. Those two product lines alone account for more than half of Microsoft's total revenue and a majority of its profits. Chief Financial Officer Chris Liddell said consumer sales of Vista surpassed the company's own expectations by $300 million to $400 million. "There is very good acceptance from a launch perspective for the product. It's early days, but we're encouraged by it," Liddell said in an interview with Reuters.