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Microsoft profits exceed expectations
Microsoft has posted second quarter profits that exceeded analysts' forecasts, despite the delayed launch of its Vista operating system.The software giant announced a 28 per cent drop in profits in the last three months of the year, while earnings fell to 26 cents per share from 34 cents per share the year before.
This compared to analysts' predictions of 23 cents per share, so the company could take some heart from results which, to the outsider, appear lacklustre.
The Windows Vista and Office 2007 consumer launch was pushed back to next Tuesday and Microsoft deferred revenue from this software from the second quarter to the current period. This has understandably had a huge impact on the firm's profits, which appear to have grown significantly in real terms.
Executives decided to defer the revenues to allow for an incentive program that gave PC buyers a discounted or free upgrade from older Windows programs to Windows Vista and Office 2007.
Microsoft's entertainment division sold a huge 10.4 million Xboxes by the end of 2006 and added $1.27 billion to the company's overall revenue.
Meanwhile, Microsoft's Office Live, which allows businesses to create their own website and accompanying online advertising, became generally available for US firms late last year.
Microsoft News posted on 26 January 2007
