Microsoft fiscal Q3 profits edge nearer to pre-recession high

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Microsoft fiscal Q3 profits edge nearer to pre-recession high

Microscope contributor

Microsoft stepped closer to pre-recessionary profit levels and returned to revenue growth across nearly all divisions in its penultimate quarter of fiscal 2010.

Amidst a bonanza of tech results this week, Redmond held its own by pushing up Q3 earnings 35% to $4bn but this was still short of the $4.39bn it notched up two years ago. Sales grew more modestly at 6% to $14.5bn.

Demand for Windows 7 was the driving factor in these quarterly financials as it became the fastest selling OS in history, amassing 10% market share worldwide since the October launch, the company said.

"While consumer demand continued to be strong we saw renewed strength from small and mid-market customers with year-on-year growth of 15%," said Microsoft investor relations boss Bill Koefoed.

The enterprise segment was slower to return to life he added as customers continued to operate lengthened sales cycles.

Sales in the Windows and Windows Live division grew 27% to $4.4bn with consumer and business licenses up 35% and 15% respectively.

"The business PC refresh has begun," said Koefoed.

Server and Tools business grew 2.3% to $3.5bn, as OEM and license sales growth was up in the high single digits, annuity revenue was flat and enterprise services grew 5%.

Online Services climbed from $507m to $566m as Entertainment and Devices rose 2.4% to $1.66bn.

Revenues in the Business division fell 5.7% to $4.2bn but grew 1% when including a $305m Office 2010 revenue deferral.

Looking to the next quarter, the software giant forecast a continued pick-up in hardware sales as the industry gradually recovers.


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