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Windows growth keeps Microsoft earnings relatively stable

Quarterly profits slip slightly

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Microsoft's latest quarterly financial results are a mixed bag: good performance from the Windows division, but overall profits down slightly.

Redmond's revenues for the quarter are $21.46bn, with an operating income of $7.77bn and profits of $6.38bn – which, while down nearly 4 per cent, is still a sizeable chunk of change.

All eyes are on the Windows division to gauge the impact of the new operating system launch, and Microsoft reported revenues of $5.88bn, up 24 per cent on the year and up 11 per cent in the last quarter. There's no change on the "60 million Windows 8 licenses sold" data, although Microsoft did say it pre-sold $783m worth, including upgrades.

"Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers," said CEO Steve Ballmer in a statement.

"With new Windows devices, including Surface Pro, and the new Office on the horizon, we'll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need."

Microsoft's Server and Tools division did well, up 9 per cent on the year at $5.19bn, which Microsoft said was down to "double-digit" growth in SQL Server and System Center.

The Business division did less well, down 10 per cent on the year at $5.69bn, but up 3 per cent on the quarter. Lync, SharePoint, and Exchange are reporting strong growth, which indirectly says a lot about fortunes of the basic Office suite.

Bing advertising revenue is up 15 per cent on the year, but overall the Online Services division revenues fell 11 per cent, a negative figure the Entertainment division's revenues shared. Entertainment revenue was down 2 per cent on the quarter, but Microsoft reasserted that it's still the top selling console in America – USA!

On the mobile front, where Microsoft faces tough competition from Android, Apple, and a possibly resurgent RIM, Redmond was the model of tact. "During the quarter, Microsoft launched Windows Phone 8 with a broad array of carriers and devices," is the solitary mention of the platform in the release.

A full conference call on the results will be webcast at 2:30pm PST (12:30am UTC). ®

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