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Last Updated: Thursday, 25 October 2007, 21:51 GMT 22:51 UK
Windows and Halo boost Microsoft
Windows software
Analysts predict strong demand ahead
Microsoft has seen strong quarterly profits, thanks to demand for its Windows operating system and its popular Halo 3 video game.

The software giant saw net profit rise 23% to $4.29bn from $3.48bn a year earlier, during its first financial quarter, beating expectations.

Revenue added 27% to $13.76bn over the three months to 30 September.

The firm also raised its yearly forecast. Shares rose 11% in after-hours trade, to more than $35.

Morningstar analyst Toan Tran described the results as a "blowout quarter".

"I think Microsoft is going to have a fabulous second quarter. Worldwide PC demand is still very strong and is going to benefit Windows and Office," he added.

"With the holiday season, we're going to have demand for Xbox 360, and for Halo 3 so the second quarter is shaping up to be fabulous for Microsoft."

Outlook

Revenue from Microsoft's Windows Vista operating system grew 25% from a year earlier, hitting $4.14bn while sales climbed 20% to $4.11bn.

Meanwhile the firm's entertainment and devices arm saw revenue climb to $1.93bn - nearly double that seen in the first fiscal quarter of 2006, helped by the Halo 3 game as well as the Xbox consoles on which the game is played.

Looking ahead the firm raised its forecast for the financial year to $58.8bn in sales from a previous estimate of between $56.8bn and $57.8bn.

The results come the same day that Microsoft announced it had paid $240m (117m) to buy a 1.6% stake in Facebook.

The deal means Microsoft will sell internet ads for Facebook outside the US.

SEE ALSO
Microsoft buys stake in Facebook
24 Oct 07 |  Business
Microsoft to carry out EU ruling
22 Oct 07 |  Business
Microsoft loses anti-trust appeal
17 Sep 07 |  Business

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