Consumers boost Microsoft profits

Strong consumer demand for PCs during the back to school shopping season fuelled "better than expected" revenue during Microsoft's third quarter.

The software giant's revenues rose six per cent to $8.22bn (£4.85bn) for the three months to the end of September, from $7.75bn for the same period last year.

Operating income for the period was $3.15bn, compared to $3.03bn reported in 2002.

MSN also enjoyed another strong quarter, with over 50 per cent advertising revenue growth, and home and entertainment revenue grew by 20 per cent, driven by slowly improving Xbox sales.

"While corporate IT spending was slow to improve this quarter, we saw strength across all of our consumer businesses, driving higher than expected revenue for the company," said John Connors, chief financial officer at Microsoft.

"Executing our plan to better help protect customers from a growing number of security attacks are our top priorities for the rest of the year."

Its growth was in line was financial analysts predictions, although there was concern that it had signed fewer new corporate contracts than expected.

For corporate business, Microsoft's Server and Tools division saw revenue grow by 15 per cent, to $1.87bn for the quarter.

Windows Server, Microsoft SQL Server and Microsoft Exchange "all experienced double-digit revenue growth", the company added.