Microsoft profits up following product launches

Redmond celebrates record revenue

Software giant Microsoft announced fourth-quarter 2010 revenue of £10.4bn, up 22 per cent year on year, driving shares up three per cent in after-hours trading.

Profits of £2.9bn marked a significant increase of 48 per cent over the same period last year.

Microsoft chief financial officer Peter Klein said: "The record quarter reflects the breadth of our offerings and our continued product momentum.”

Microsoft has launched a number of products this year, including the latest version of its Office cash cow, Office 2010, a product its chief operating officer Kevin Turner said had driven its financial performance.

The other bright spot for the Redmond-based firm is its latest operating system, Windows 7, which it claims has 175 million buyers and has been installed in more than 16 per cent of PCs worldwide.

However, enterprise uptake of the operating system remains limited by enterprises sticking to an extended refresh cycle, courtesy of the global financial meltdown.

Microsoft’s push into cloud computing has yet to affect the company’s bottom line, but its drive into the sector is seen by many analysts as recognition of the way the market is headed.

Success in public and private cloud-based computing could eventually lead to a reduction in sales of its client applications, and Microsoft has received credit for addressing the potential problem, unlike some of its software rivals.

For the fiscal year ended 30 June 2010, Microsoft’s revenue was $62.5bn (£40.6bn), up seven per cent from the prior year, with profits up 29 per cent over last year at $18.8bn.