Microsoft has reported record fourth-quarter revenue of $11.8bn (£6.35bn), with all operating units – apart from MSN – growing over the period.

The results have defied market predictions, with operating income up 30 per cent to $3.9bn (£2.1bn), even after the EU imposed fines of $351m (£189m).

Net profit fell 24 per cent for the quarter to $2.82bn (£1.52bn) because of a low tax bill in 2005. But full-year revenue rose 11 per cent to $44.3bn (£23.9bn) and full-year net profit rose three per cent to $12.6bn (£6.8bn).

‘We are seeing fantastic momentum in multi-year licensing growth as user excitement for upcoming products drove higher-than-expected annuity sales and unearned revenue growth,’ said Microsoft chief operating officer Kevin Turner.

Of the three largest operating divisions, server and tools was strongest, growing 15 per cent to $11.5bn (£6.2bn). Client revenues grew nine per cent to $13.2bn (£7.1bn) and those derived from information worker groups rose five per cent to $11.8bn (£6.4bn).

‘Microsoft Business Solutions (MBS) put in a very good year, and is moving towards that magical $1bn (£539m) threshold,’ said Ovum analyst David Bradshaw. ‘Microsoft CRM played a large role in the growth of MBS.’

MSN is undergoing a major overhaul of its infrastructure, which has hit its advertising revenues. But its dial-up business is gradually dying away because of the ubiquity of broadband.

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Further reading

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