Office 2010, Xbox 360 Sales Boost Microsoft's Q4 Results

But sales of the Windows operating system were down due, at least in part, to slower consumer PC sales and a big decline in sales of netbook PCs.

For the fourth fiscal quarter ended June 30, Microsoft reported sales of $17.4 billion, up 8 percent from $16.0 billion in the same period one year earlier. Net income soared 30 percent to $5.9 billion in the quarter compared to $4.5 billion one year ago.

For fiscal 2011 ended June 30 Microsoft reported sales of $69.9 billion, up 12 percent from $62.5 billion in fiscal 2010. Net income for the year climbed 23 percent to $23.2 billion from $18.8 billion last year.

"We delivered solid financial results for the fourth quarter and full fiscal year," said chief financial officer Peter Klein in a conference call with financial analysts. "As we look towards fiscal year 2012 we have good product momentum in the market."

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Sales generated by the company's Server and Tools Business grew 12 percent to $4.6 billion in the fourth quarter and 16 percent to $17.1 billion for all of fiscal 2011. Microsoft said increased sales of Windows Server and the SQL Server database helped fuel the 11 percent increase in product revenue to $1.4 billion.

The Microsoft Business Division reported 7 percent revenue growth to $5.8 billion for the fourth quarter and 16 percent growth to $22.2 billion for the fiscal year. Sales of Office 2010, which launched last year, were the prime growth engine for the division, although sales of Lync and SharePoint also were strong.

Klein also said that 20 percent of Fortune 500 companies have begun to adopt the Office 365 cloud application suite that just went live late last month.

But sales from the Windows and Windows Live Division were down 1 percent in the quarter to $4.6 billion and down 2 percent to $17.1 billion for the fiscal year.

Microsoft attributed that to an overall slowdown in the PC market to which Windows sales are closely tied. While the overall PC market grew between 1 and 3 percent in the quarter, Microsoft said, the 8 percent growth in PC sales to businesses was offset by a 2 percent decline in consumer PC sales. Microsoft said that decline included a 41 percent plunge in netbook sales.

Sales for Microsoft's Entertainment and Devices Division, fueled by demand for Xbox 360 and Kinect products, increased 30 percent in the fourth quarter to $1.49 billion and 45 percent to $8.91 for fiscal 2011.

The Online Services Division reported fourth-quarter sales of $662 million, up 17 percent, and $2.5 billion for the fiscal year, a gain of 15 percent.