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Microsoft feasts on Vista coupons for record quarter

Profits up 65 per cent

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Microsoft posted a 65 per cent boost in its third-quarter net income thanks in large part to revenue from major new releases and upgrade coupons that promoted them. Both profit and sales for the period that ended in March surpassed analyst estimates.

Shareholders welcomed the results by driving shares up almost five per cent in extended trading. They had already risen 11 cents, or about 0.4 per cent in regular trading before the results were released. With Microsoft in the midst of two major product releases, investors have been eager for signs how Vista and Office 2007 are faring.

"We are delighted with the positive customer response these products have received," Microsoft Chief Operating Officer Kevin Turner said in a statement. There was no mention from Redmond of Dell's recent move to sell PCs running Windows XP due to customer complaints about the new OS.

Profit was $4.9bn, or 50 cents a share, compared with about $3bn or 29 cents in the same period last year. Sales grew 32 per cent to $14.4bn from $10.9bn.

Analysts on average had forecast profit of 46 cents on revenue of $13.9bn.

About $1.7bn of revenue, or 12 cents profit, actually came from the previous quarter when computer buyers snapped up coupons allowing them to upgrade to Vista and Office 2007 once they were released in January.

Microsoft forecast earnings for fiscal 2008, ending in June of next year, of $1.68 to $1.72 on revenue of $56.5bn to $57.5bn, well within the range of analyst expectations. ®

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