By Josh Ong

Published: 10:30 PM EST (07:30 PM PST)

After Microsoft on Thursday announced record revenue of $17.37 billion, analysts quickly voiced concerns over the news that revenue from the company's Windows division declined 2 percent in fiscal 2011.

The Redmond, Wash., Windows maker drew a muted response to the revelation of 8 percent year over year growth and net profit of $5.87 billion during its fourth quarter of fiscal 2011. For the full fiscal year, which ended on June 30, the company reported $69.94 billion in revenue, up 12 percent from 2010.

"Throughout fiscal 2011, we delivered to market a strong lineup of products and services which translated into double-digit revenue growth, and operating margin expansion,” said Peter Klein, chief financial officer for the company. “Our platform and cloud investments position us for long-term growth.”

Analysts, however, were skeptical over the long-term likelihood of Microsoft's growth, honing in on the fact that its Windows business declined 1 percent in the fourth quarter and 2 percent for the fiscal year. However, the company asserted that, excluding the impact of last year's Windows 7 launch and revenue deferral, Windows growth was in line with the overall PC market growth of 2 percent to 4 percent.

Despite a 16.25 percent increase in sales, Microsoft's online services unit, which has bled almost $6.5 billion dollars over the past three years, posted a loss of $728 million, compared to a loss of $688 million a year ago.

"All eyes are on Windows and how they are ultimately going to extend this franchise in the future, as the PC business continues to lose share to the tablets," Reuters reported Edward Jones analyst Josh Olson as saying. "Microsoft is really a show-me story in terms of its ability to extend its core flagship products to these new growth platforms."

"These numbers are good. The question is, what will make Microsoft break this range in which it is stuck, between $25 and $28?" said Trip Chowdhry, managing director at Global Equities Research. "I don't see these numbers giving an indication that the stock is going to break away."

Shares of Microsoft remained flat in after-hours trading. Since the beginning of the year, the stock is down 2.71 percent.

Even as Apple's iPad has eaten into PC sales, Microsoft is betting that the next version of Windows will reverse the trend. Instead of opting to design an operating system specifically for tablets, the company has said it "views a tablet as a PC" and plans to bring Windows "everywhere on every device without compromise."

The company's results comes as a stark contrast to Apple's blowout performance in the June quarter. The Cupertino, Calif., company posted $28.57 billion in revenue and a 125 percent leap in profits to $7.31 billion, nearly 25 percent more than its rival's profits. It was just last quarter that Apple beat Microsoft's profits for the first time in decades.