Microsoft quarterly profits beat expectations

The world’s largest software firm made a net profit of $5.11bn (£3.2bn), compared with $5.23bn a year earlier with sales rising by 6 per cent to $17.41bn.

Windows sales rose 4 per cent against forecasts of a 4 per cent decline, though sales at its entertainment division, which includes the Xbox console, fell 16 per cent.

Its business division saw revenues increase 9 per cent “reflecting the continued strength of Office 2010”, the company said.

Brendan Barnicle, analyst at Pacific Crest Securities, said the results looked good. “Particularly good was the Windows business, which grew about 4 per cent, more than PC industry growth. In the last few quarters, Windows has been growing less than PCs overall.”

“It’s not clear yet what drove this change, but it could be that the negative impact on PCs from tablets has peaked. The Office business was particularly strong too, which is encouraging.”

Microsoft shares rose 3 per cent in after-hours trading in New York. The company also noted that the results for the same quarter a year ago had been boosted by a $461m tax benefit.