Microsoft steamrollers through Q1

Who needs new product when you knock out results like this: Microsoft may be late with Windows Vista and late with Office 2007, the upgrades for its two biggest revenue spinners - but it still produced a stellar September quarter.

Revenue in its fiscal Q1, ended September 30, was $10.8bn, 11 per cent up on same time last year and at the top end of the company's expectations. Net income was $3.48bn (Q1 '06 $3.1bn). Microsoft noted strong sales of business tools and SQL server software; and Xbox 360s are flying off the shelves. But everyone knows that it makes its big money from Windows and Office.

So, it can look forward to a revenue lift in Q3 when Vista, Office 2007 and Exchange 2007 come on stream. But first it has to get through Q2.

To stop a sales wobble in the December quarter, it is pumping out upgrade coupons for Vista and Office for the PC makers to dish out to their customers. It thinks this will result in a revenue deferral of $1.5bn in Q2.

For the full year, Microsoft forecasts revenue of $50bn-$50.9bn and operating income of $19.1bn-$19.5bn. ®