Sales and operating profit jump at Microsoft

Microsoft has announced an 11% increase in sales and a 13% increase in operating profit for the year.

Microsoft has announced an 11% increase in sales and a 13% increase in operating profit for the year.

For the year ended 30 June, the company announced sales of $44.28bn (£25.3bn) and a $16.47bn operating profit.

The operating income was recorded despite Microsoft paying out $1.11bn in legal charges, including a recent fine imposed by the European Commission for not complying with a 2004 anti-trust judgement.

Last year, the company's legal costs amounted to $2.06bn, which included a settlement with Real Networks.

For the fourth quarter, the company saw its sales increase 16% and its operating profit jump 30%, compared with last year’s fourth quarter.

Chris Liddell, Microsoft chief financial officer, said, “We delivered a very strong finish to the fiscal year highlighted by customer demand for our recently launched products of Xbox 360, SQL Server 2005, Visual Studio 2005 and Microsoft Dynamics CRM 3.0, which fuelled a combined 31% revenue growth of their business groups for the quarter.

“Our upcoming launches of Windows Vista, the 2007 Microsoft Office system, Exchange Server 2007 and other key products position us to continue to deliver strong revenue growth in fiscal year 2007. We are also very pleased that both the Microsoft Business Solutions and the Mobile and Embedded Devices businesses achieved profitability for the full fiscal year.”

These two businesses had previously struggled to deliver a positive contribution to Microsoft’s balance sheet.

The company also announced a new share buyback programme, with a $20bn tender offer scheduled for completion on 17 August 2006, as well as authorisation for up to an additional $20bn ongoing share repurchase programme until 30 June 2011.

The company said it had completed its previously announced $30bn stock buyback programme.

“With our share repurchase programme announcement today, we reaffirm our confidence and optimism in the long-term future of the company and continue to execute on our strategy of returning capital to shareholders,” said Liddell.


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