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Microsoft Posts Higher Fiscal Q1 Sales, Profits

10/26/2006 03:56:00 PM Eastern

Redmond, Wash. – Microsoft reported first quarter revenue of $10.81 billion for the period ended Sept. 30, an 11 percent increase over the same quarter of the prior year.

Operating income for the quarter was $4.47 billion, an 11 percent increase compared with $4.05 billion in the prior year period. Net income for the first quarter was $3.48 billion. For the same quarter of the previous year, net income was $3.14 billion.

“The solid revenue results for the quarter were at the top end of our expectations and represent a very good start to the fiscal year,” said Chris Liddell, chief financial officer.

Entertainment and Devices Division revenue growth of 70 percent over the prior year was driven by demand for Xbox 360 consoles, software, peripherals, and Xbox Live. Xbox 360 has sold 6 million consoles worldwide life-to-date and achieved record cumulative attach rates for software and peripherals in the United States, while Xbox Live passed the 4 million member mark during the quarter.

Microsoft said it has made considerable progress toward delivering two highly anticipated products to customers with the forthcoming releases of Windows Vista and the 2007 Microsoft Office system. During the quarter, the first release candidate for Windows Vista was made available to nearly 5 million customers worldwide, and the beta 2 version of the 2007 Microsoft Office system was in use by over 3 million customers, the company said.

“The strong results are a reflection of our solid execution and ongoing focus on operational excellence,” said Kevin Turner, COO at Microsoft. “As we look to the upcoming releases of Windows Vista, the 2007 Microsoft Office system and Exchange Server 2007, we are excited about these products and believe they will deliver unprecedented levels of business value to our customers.”

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