Vista revenues boost Microsoft's third quarter results

Deferred income from the release of Windows Vista and Office 2007 has pushed Microsoft’s third quarter revenues up 32%, with profits soaring 65% compared with the same quarter last year.

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Deferred income from the release of Windows Vista and Office 2007 has pushed Microsoft’s third quarter revenues up 32%, with profits soaring 65% compared with the same quarter last year.

The software giant posted revenues of $14.4bn (£7.2bn) for the third quarter ending 31 March. Profits were $4.93bn (£2.47bn), up from $2.98bn (£1.49bn) in the same period last year and slightly higher than estimates from analyst firm Thomson Financial.

The delay in the release of both the Vista client operating system and Microsoft Office 2007 from the second quarter of the financial year to early in the third quarter gave Microsoft $1.67bn (£835m) of deferred revenue and pushed $1.14bn ( £570m) profits into the third quarter.

Microsoft had played down the revenues impact from Vista to avoid a backlash from Wall Street if results were poorer than anticipated. But Vista did a little better than the company predicted, driving revenues slightly higher than estimates.

Vista revenue will continue to play a key role in Microsoft's client business during the 2008 financial year, the company’s chief financial officer Chris Liddell said. The company predicted that the percentage breakdown between sales revenue from Vista and Windows XP would be 85% to 15% in that time frame.

"Obviously, the faster the transition to Vista, the bigger and more positive the impact will be in '08," Liddell said.

Windows Server "Longhorn" – a long-awaited update – is due to be released in the second half of this year, while new versions of Microsoft’s customer relationship management (CRM) software and the Visual Studio developer tools are also set to be launched before the end of the year. Earlier this week, Microsoft launched a Longhorn public beta. http://www.computerworlduk.com/technology/operating-systems/windows/news/index.cfm?newsid=2744

Next year is set to see the release of the Microsoft Expression Studio multimedia web-design toolkit, the business antivirus software Forefront Client Security and Microsoft's Live CRM hosted service.

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