Microsoft reports 3rd quarter earnings

Friday 27th April 2007, 06:06:00 PM, written by Carl Bender

Microsoft has reported record profits for the financial quarter ended March 31st, with net income rising 63% relative to the year-ago period to $4.9 billion today. Revenues were up sharply as well, reaching $14.4 billion compared to $10.9 billion in Q3 of '06. Both results were driven primarily by the sale of Microsoft's new Vista operating system and its Office suite of productivity software.

For its part, the launch of Vista represents the culmination of billions of dollars in development expenditure and several years of coding effort. Although specific stories of Vista-related consumer uptake have been mixed, the price per unit as well as the volumes generated via OEM adoption have worked to ensure a significant contribution to the present bottomline for Microsoft.

The high-profile Entertainment and Devices Division - home to both the Xbox and Zune - recorded lowered revenues on slower 360 sales. This partially a result of Microsoft's channel stuffing to reach year-end shipment targets at the close of 2006; demand and sales for the console are expected to increase going forward into the year, with the new Elite revision of the console likely to provide a noticable boost to revenues. Although the extension of the Xbox 360 warranty to one-year vs the original 90 days took some additional blame for division-related earnings pressure, Entertainment and Devices still managed to reduce net loss to $315 million for the quarter, vs $402 million for the year-ago period.

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± microsoft, quarter, results, xbox

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