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Microsoft in the black after posting strong results

Windows may be facing a challenging year
Windows may be facing a challenging year

Microsoft has posted its quarterly financial report, revealing that it made record revenues of $17.4 billion (£10.6 billion) in the three months ending in June.

The strong results are largely thanks to robust Office and Xbox sales, with profits for the company up by 4 per cent to $6.2 billion (£3.8 billion).

There was particularly good news from the Xbox and Windows Phone wielding entertainment and devices division, which made nearly $32 million in profit - a far rosier picture than a year ago when it posted massive losses of $172 million.

Party hats all round?

While the champagne corks may be popping at Redmond for now, there could be a bumpy road ahead; the seemingly healthy entertainment and devices department is actually in its second quarter of decline.

Meanwhile, Microsoft's shares have also fallen over fears that demand for the Windows operating system and associated software is low.

Although the worldwide PC market has grown by nearly 2%, the Windows division's revenues are down by 1% compared to the same time last year - however, with Windows 8 just around the corner, the situation could be reversed within a year.

Another problem area for Microsoft seems to be the online services department, which includes search engine Bing and all its cloud-based products, where it made a big loss.

Comparisons to the once-underdog Apple are inevitable; Jobs and co posted net profits of $7.31 billion (£4.53 billion) for the same quarter; not only is that higher than Microsoft's record report, but Apple's revenues were a 125 per cent improvement, while Microsoft's are up only 8 per cent.

Via The Guardian