Microsoft announces record $16.37 billion Q2 revenue

Microsoft has announced record Q2 revenue, operating income, and diluted earnings per share, surpassing analyst expectations.

Revenue was USD 16.37 billion, operating income was USD 6.48 billion, and diluted earnings per share was USD 0.50, representing a 30 per cent, 87 per cent, and 92 per cent increase, respectively, over the prior period.

Analysts had projected earnings of USD 0.46 per share.

"Revenue of over USD 16 billion this quarter exceeds our previous record by USD 2 billion," said Microsoft CFO Chris Liddell.

"We are extremely pleased by the broad based strength of our business performance and field execution. Throughout the first half of our fiscal year, all of our businesses met or beat our expectations."

The profit increase was attributed to a stronger-than-expected performance from the games division and a boost in sales of Microsoft's Vista operating system for PCs.

Revenue in the games division responsibile for the Xbox 360 rose 3.1 percent to USD 3.06 billion - much better than Microsoft's forecast of an 8 per cent decline. Lifetime shipments of Xbox 360 consoles reached 17.7 million during the quarter.

For the third quarter ending March 31, Microsoft expects revenue in the range of USD 14.3 - 14.6 billion and diluted earnings per share of USD 0.43 - 0.43, in line with analyst estimates.

The company has raised its estimates for the full fiscal year, forecasting profits of USD 1.85 - 1.88 per share on sales of USD 59.9 - 60.5 billion for the year ending June 30.

Microsoft had previously forecast profit of USD 1.78 - 1.81 per share on sales of USD 58.8 - 59.7 billion.

Financial results were released after the market closed. The company's stock finished the day at USD 33.25, up 4.13 per cent.