updated 03:35 pm EST, Fri January 27, 2006
MS reports 2Q results
Microsoft's Windows operating system--not the company's popular Xbox--helped boost profit for the company in its second quarter, along with the successful launch of a new server product. Microsoft this week posted slightly increased--up about 5 percent--earnings of $3.46 billion on increased revenues of $11.84 billion, which were up 9 percent from last year. Meanwhile, Forbes notes that the Xbox reportedly fell slightly short of its sales target. Microsoft loses money with each Xbox, according to AP. The home and entertainment division, which sells the console, posted a $293 million loss for the Christmas quarter, a quarter in which it earned $55 million the year before largely because of the Xbox loss-leader. In contrast, Apple earlier this month reported a record profit of $565 million on on record revenues of $5.7 billion.
"Rather like movie theaters that make most of their money on extortionately priced popcorn and drinks as opposed to tickets, Ballmer apparently hopes to make back money lost by the Xbox, on software and peripheral sales."
Microsoft's MSN division also saw earnings fall from $130 million last year to $58 million in the second quarter, largely because of a take-up of broadband over narrowband, according to the report.
Following the earnings, Microsoft shares were up nearly 3 percent.