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Microsoft Q2 profit tops expectations, up 81%

Microsoft last night reported that its profits surged 81% after record revenues of $16.4 billion in the last three months of 2007 due to intense demand for computer software.

Microsoft said its net profits for the quarter climbed to $4.71 billion, or 50 cents per share, compared with $2.6 billion, or 26 cents a share, in the same period a year earlier. The earnings topped analysts’ expectations. Microsoft credited its new Windows Vista operating system - released a year ago - with lifting sales in the business and personal computer sectors. Demand for Microsoft software including Office, Sharepoint, Exchange, and Vista remains strong, according to the US software giant. Chief operating officer Kevin Turner said Microsoft was continuing to see heavy demand from businesses and consumers in the US, while growth in emerging markets was “especially strong”.

The results and raised forecasts from the world’s largest software maker came on the heels of disappointing outlooks from tech bellwethers Intel Corp and Apple Inc, which sent shivers through a US stock market that shed about 10% to start the year, before bouncing. “It looks like a very nice report,” said Sarah Friar, an analyst for Goldman Sachs. She attributed Microsoft’s improved profitability to ‘better-than-expected’ results in two high-margin areas: software for businesses and Xbox 360s. “It’s clear that this new product cycle is paying off,” said Andy Miedler, technology analyst at Edward Jones. “We’re impressed that they had enough confidence to follow through and raised guidance.” (RTÉ Business, Xinhua)