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Friday, January 25, 2008

79 percent quarterly leap -Xbox key to strong quarter for Microsoft
(24hoursnews) Jan. 24 Microsoft Corp. Thursday reported a 79 percent jump in quarterly net income from a year ago after figuring deferred sales of Windows Vista and Office.Quarterly revenue by the world's largest software company jumped 30 percent amid a surge in sales for the Windows operating system and holiday sales of the Xbox 360 videogame console, the Wall Street Journal said.Microsoft shares climbed 4.4 percent in after-hours trading to $34.70 after rising 4.1 percent in regular trading Thursday.The company reported net income of $4.71 billion, or 50 cents a share, for the quarter ended Dec. 31, compared with $2.63 billion, or 26 cents a share, a year earlier.


Microsoft Corp.'s X-factor is the Xbox 360.
The software giant rode strong sales of its video game console over the holiday season and growing demand for the Windows Vista operating system to record quarterly results, bucking the recent trend of disappointing forecasts by U.S.-based technology companies such as Intel Corp. and Apple Inc.
On Thursday, Microsoft announced it was raising its forecast for fiscal 2008, and the company's upbeat outlook should ease concerns of slower consumer technology spending in a weakening U.S. economy.
“Results for the quarter were outstanding,” Microsoft chief financial officer Chris Liddell said.

Microsoft forecasted earnings per share of $1.85 (U.S.) to $1.88 for the year ending June 30, topping Wall Street expectations of between $1.78 and $1.81. The Redmond, Wash.-based company said revenue is expected to be in the range of $59.9-billion to $60.5-billion and operating income of $24.2-billion to $24.4-billion.
Investors on Wall Street drove shares of the world's largest software company up more than 5 per cent on the Nasdaq Stock Market in after-hours trading yesterday, after hearing the news that Microsoft's forecasts followed the lead of other technology firms with international reach, such as IBM Corp. With 60 per cent of sales now coming from outside the United States, Mr. Liddell said Microsoft expects to weather any storms caused by U.S. economic woes.
PC sales were better than Microsoft had expected for the quarter, which helped to push sales of the company's software, specifically Windows Vista and Office. Client division sales – which includes Vista – rose 67 per cent to $4.34-billion for the quarter, while sales in the business division – which oversees Office software – jumped 37 per cent. More than 100 million licences have been sold for Windows Vista so far.
For the second consecutive quarter, Microsoft's entertainment and devices division finished in the black, after holiday shoppers snapped up Xbox 360 consoles at a record pace. Microsoft has said the division, which oversees the company's Xbox, Zune music player and Windows Mobile brands, is expected to turn an annual profit for the first time this fiscal year.
So far, things are on track, with division revenue rising 25 per cent over the same period last year to $4.9-billion, and topping $524-million in profit in the first six months of the financial year.
More than 17.7 million Xbox 360 consoles were sold worldwide by the end of 2007. In Canada, the Xbox 360 outsold both Sony's Playstation 3 and Nintendo's Wii in December, the first time the console has beaten both its rivals since September when the wildly popular game Halo 3 shattered records upon its release.
However, the Wii outsold Microsoft's console 567,200 to 385,200 for the year, and is catching up in overall sales despite the Xbox 360's 12-month head start in this current generation battle of the console wars.
In addition to strong console sales, the division also had four video game titles which sold more than one million copies, signed its 10-millionth Xbox Live member six months ahead of schedule and watched the number of songs downloaded from the Zune Marketplace double over the same period last year.
For the quarter ending Dec. 31, Microsoft reported profit of $4.71-billion or 50 cents, compared with $2.63-billion or 26 cents in the year-earlier period. Revenue rose 31 per cent to $16.37-billion from $12.54-billion.

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