Microsoft profit dips despite Windows 8 sales boost

Microsoft logo Analysts said Microsoft was benefiting from operating in a variety of technology sectors

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Microsoft has reported a fall in profits despite a boost in sales from the technology giant's new Windows 8 operating system.

Net profit for the final three months of the year was $6.4bn (£4.1bn), down 4% from a year earlier, while revenue was up 3% at $21.5bn.

The Windows arm of the firm performed well, with revenues up by a quarter, following the launch of Windows 8.

The results come on the day that Apple shares fell 12% on disappointing sales.

Much of Microsoft's revenue growth was eaten up by an increase in spending on sales and marketing, while stronger earnings at the Windows division were partly offset by a decline in sales of the company's Office products.

"Our big, bold ambition to re-imagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers," said chief executive Steve Ballmer.

'Nice quarter'

Analysts said the company benefited from operating in a number of different technology sectors, protecting it from weakness in the PC market.

"[Microsoft] has multiple revenue streams that are still very nice businesses... I would say it's a very nice vanilla quarter," said Colin Gillis at BGC Financial. "In this environment, we'll take it."

The company did not release sales figures for its new tablet computer, Surface - its answer to Apple's hugely successful iPad.

The reason, some analysts said, was simple.

"I don't think they want to provide that because it won't be impressive," technology analyst Patrick Moorhead said.

Microsoft's results come a day after Apple reported record quarterly revenues of $55bn. However, flat profits, disappointing iPhone sales figures and fears about future growth prospects pushed Apple shares down 12% on Wednesday, wiping about $50bn off the company's value.

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