Microsoft reported record sales of $69.9bn and net income of $23.15bn for the full year ending 30 June 2011, with a small decline in Windows sales more than offset by sales of Office 2010 and other business products and the success of its Kinect and Xbox 360 gaming products.
Windows sales were down 2% to just over $19bn for the year, outstripped by the performance of the business division where sales grew 16% to $22.2bn. Microsoft attributed the division's strong performance to Office 2010 which is the fastest selling version of the vendor's suite to date.
Sluggish growth in the PC business affected Windows sales and the vendor has been unable to offset it with growth in other areas because of its failure to date to build a presence in the fast growing tablet market.
The server and tools business grew 11.1% to $17.1bn while the Entertainment & Devices operation, which includes Xbox 360 and Kinect, increased by 45% to $8.9bn.
Microsoft's online services division, which includes its Bing search engine, grew revenue 15% to $2.5bn but operating losses reached $2.6bn. In the last three years, the online services division has reported losses of more $6.5bn.