Blog Post

Earnings: Microsoft Revenue Up 27 Percent; Profit Rises 23 Percent; Online Ad Rev Up 33 Percent

Microsoft (NSDQ: MSFT) turned a profit of $4.29 billion, or $0.45 per share for the quarter ending Sept. 30, compared with $3.4 billion, or $0.35 per share in the same quarter last year. Revenues were up 27 percent to $13.76 billion in the quarter ending Sept. 30, fueled, in part, by sales of new operating system Vista.

Entertainment and devices: The home of Xbox brought in $1.93 billion in revenue, up from $1.01 billion in the same 2006 quarter. Operating income swung to black with $165 million, compared with last year’s first QFY1 loss of $142 million.

Online Services Business/Advertising: Still the smallest division, Online Services lost $264 million on revenues of $671 million. In the same quarter last year, the group lost $102 million on $536 million ijn revenue. The 25 percent growth in revenue included $80 million from aQuantive for the half-quarter since the close. Live ID signups grew 19 percent to 405 million. Advertising revenue grew 25 percent, excluding the acquisition of aQuantive, and was up 33 percent overall.

Earnings release | Slides (ppt) | Webcast | Transcript (SeekingAlpha)

Some highlights from the earnings call: One constant throughout — the kind of analyst compliments usually heard during a Google (NSDQ: GOOG) call.

Online advertising: CFO Chris Liddell: “We