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Microsoft profits due to recent sales

Jeremy Hobson Jan 25, 2008


Scott Jagow: Wall Street really is so much about expectations. A couple days ago, Apple turned in one of its best profit reports ever. But the company said next quarter, it wouldn’t meet Wall Street’s lofty goals. Apple shares fell more than 10 percent.

Last night, Microsoft said it had a great quarter, like Apple. But Microsoft gave investors a bright forecast for the coming months. The company’s shares are up 5 percent this morning. More now from Jeremy Hobson.

Jeremy Hobson: Revenue at Microsoft jumped 30 percent to more than $16 billion. That’s a record for the company.

Brian Madden: Even in a little bit down markets, people need the technology, and they don’t have too many choices besides Microsoft.

Brian Madden and other industry analysts are attributing the good news to sales of a number of recently released Microsoft products.

Windows Vista hit the shelves in early 2007. New XBox games led to a spike in hardware demand. And, Madden says, Microsoft is selling subscriptions to Office software instead of relying on customers to buy updates on their own.

Madden: They’re transitioning their most profitable customers, which is their business customers, into this subscription model where these customers are sort of locked into Microsoft.

Microsoft expects the uptick in sales will continue. The company raised its outlook for this fiscal year by about 2 percent.

I’m Jeremy Hobson for Marketplace.

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