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Microsoft earnings decline as Windows sales drop

Microsoft has reported 11% decline in net profit at $4.38bn for the third quarter, on revenue up 0.3% at $14.45bn. It said the drop in earnings was due to a 24% drop in Windows sales and lower revenue from its online advertising unit.

By CBR Staff Writer

Revenue from the client division was $4.02bn, down 24% from the previous year, while sales at the server and tools division rose 18% to $3.25bn. Entertainment and devices revenue grew 68% to $1.57bn, while others remained stable at $10m. Online services revenue was up 40% at $843m.

Microsoft’s chief financial officer Chris Liddell said: Our broad span across geographies, product categories and customer segments is a tremendous asset and supports our outlook for double-digit revenue, operating income and earnings per share growth for this fiscal year and also for fiscal year 2009.

Looking ahead, the company expects fourth-quarter revenue of $15.5bn to $15.8bn, and revenue for the year to be $66.9bn to $68bn.

The company is trying to acquire Yahoo to boost its online services business and it has set Yahoo a deadline of Saturday to accept its $31 a share offer or face a hostile takeover bid.

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