Microsoft's game business posts a profit

Microsoft has announced its first quarter earnings, with the entertainment and devices devision reporting income of USD 165 million.

Overall, the company's revenue totaled USD 13.76 billion for the quarter ending September 30, a 27 per cent increase over the same period of the prior year. Net income was USD 4.92 billion, with USD 0.45 earnings per share for the quarter.

"This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999," said Chris Liddell, chief financial officer at Microsoft.

During the quarter, Microsoft's entertainment and devices division released Halo 3, the biggest entertainment launch in history.

Revenue for the division was USD 1.93 billion, up from USD 1.01 billion in 2006. Operating income for the division was reported to be 165 million, compared to a loss of USD 142 million the prior year.

For the second quarter, Microsoft expects revenue in the range of USD 15.6 to 16.1 billion, operating income in the range of USD 5.9 to 6.1 billion, and diluted earnings per share in the range of USD 0.44 to 0.46.

For the full fiscal year ending June 30, 2008, Microsoft expects revenue in the range of USD 58.8 to 59.7 billion.

The full fiscal year guidance includes approximately USD 85 million of estimated integration costs and in-process research and development expenses due to the acquisition of aQuantive.