Microsoft net profit slips despite record 2Q revenue (AFP)

SAN FRANCISCO (AFP) – Microsoft on Thursday reported its net profit slipped despite record-high revenue in the last quarter on sales of computers and Kinect controllers for Xbox 360 consoles.

The US technology titan made $ 6.63 billion in net profit on $ 19.95 billion in revenue in the quarter ending December 31.

Net profit for the quarter was slightly below the $ 6.66 billion the firm made in the same period a year earlier even though revenue climbed nearly a billion dollars.

“We are enthusiastic about the consumer response to our holiday lineup of products, including the launch of Kinect,” said Microsoft chief financial officer Peter Klein.

“The pace of business spending, combined with strong consumer demand, led to another quarter of operating margin expansion and solid earnings per share growth.”

Microsoft sold more than eight million gesture-sensing Kinect controllers for Xbox 360 videogame consoles in the 60 days after it hit the market in November, chief executive Steve Ballmer said early this month.

Kinect lets people control on-screen action with body movements or spoken commands and is priced at $ 150.

A 55 percent growth in revenue at Microsoft’s entertainment and devices division was credited with helping boost the amount of money the company took in during the quarter.

Microsoft said that Windows 7 has become the fastest selling operating system in the company’s history and now runs more than 20 percent of personal computers connected to the Internet.

Highlights in the recently-ended quarter included the launch of Windows Phone 7 software in 30 countries, and the completion of a deal to use Microsoft’s Bing engine to power search at Yahoo! websites.

Microsoft said that its shift to offering software as services in the Internet “cloud” continued to gain momentum in the quarter, with film studio Pixar Animation being among the companies using its Azure platform.

“Business demand for our productivity and infrastructure products and cloud solutions is strong,” said Microsoft chief operating officer Kevin Turner.

Microsoft beat Wall Street expectations for the quarter, but its stock slid slightly less than a percent to $ 28.63 in trading that followed release of the earnings figures.