Microsoft posts record revenues for second quarter

Slightly higher than expected thanks to Xbox 360

26 January 2007 12:43 GMT / By Amber Maitland

Microsoft's strong Xbox 360 has helped it post revenues above the expected number during its fiscal second quarter.

It reported record quarterly revenues of $12.45 billion, which is more than the $12.09 billion that analysts were expecting.

In addition, Thomson Financial had predicted that earnings would reach 23 cents per share, but Microsoft exceeded that at 26 cents a share. This, however, is lower than the 34 cents per share that the company earned in the second quarter last year.

Earnings may have declined because of the imminent launch of Vista, which has caused many PC buyers to wait before purchasing until closer to the launch.

“The results show that customers are clearly ordering and pre-ordering new software”, Walter Pritchard of Cowen and Company told CNN Money.

“Even Windows sales were strong, despite it being the quarter before Vista's release.”

As sales numbers have previously shown, the Xbox 360 sold extremely well during the holiday period, which translated to a 76% rise in sales in the company's entertainment and devices division from a year ago.