Microsoft Logs Success In I.T. And Consumer Sales

Microsoft reported solid sales growth across its core software product lines in its fiscal fourth quarter. But Microsoft's home and entertainment and mobile and embedded businesses, while still small, are recording the fastest growth.

Microsoft reported a 10% year-over-year revenue increase to $10.2 billion for the quarter ended June 30. Net income surged more than 37% to $3.7 billion. For the fiscal year, the company reported revenue of $39.8 billion, up 8% from 2004, and net income of $12.3 billion.

Rapid customer adoption of Microsoft's SQL Server database helped fuel the 16% sales growth in the company's server and tools business in the quarter to $2.7 billion. Microsoft's client (desktop operating systems) business increased 10% to $3.0 billion. But sales of Microsoft Office and other information-worker products increased only 3% to $2.9 billion, and MSN revenue fell 1% to $582 million.

In contrast, strong sales of Microsoft's Xbox products were largely responsible for the 22% sales gain in the home and entertainment business to $610 million, and sales of mobile and embedded device products spiked 37% to $97 million.