Microsoft posts record Q2 revenue

Citing strength across its business, Microsoft has reported record revenue for its second fiscal quarter that beat its own guidance as well as Wall Street's expectations.

In the final three months of 2004, Microsoft recorded revenue of $US10.82 billion, up 7 per cent from $US10.15 billion the year-ago period. Net income for the quarter amounted to $US3.46 billion, up from $US1.55 billion in the year-earlier period, Microsoft said.

Earnings per share for the quarter were $US0.32, including expenses for stock-based employee compensation, the company said.

Microsoft surpassed its own forecast, given in October, for revenue between $US10.3 billion and $US10.5 billion and earnings per share of $US0.28. Analysts had expected Microsoft revenue to be $US10.55 billion, according to a consensus estimate from Thomson First Call.

While both its consumer and business segments performed well, Microsoft highlighted its Home and Entertainment segment in its earnings release. The group, benefitted from strong sales of the Xbox game console and Halo 2 game, posted its first profitable quarter in the final quarter of 2004, Microsoft said.

Microsoft upped its earnings and revenue forecast for its full 2005 financial year, which ends June 30. The software maker now expects earnings per share to come out between $US1.09 and $US1.11 and revenue to be between $US39.8 billion and $US40 billion. In October the forecast was for full-year earnings per share between $US1.07 and $US1.09 and revenue between $US38.9 billion and $US39.2 billion.

For its third fiscal 2005 quarter, which ends March 31, Microsoft forecasts revenue between $US9.7 billion and $US9.8 billion. Earnings per share were expected to be $US0.27 or $US0.28, including stock-based compensation expense, the company said.

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