Microsoft Q2 Revenue Up 5 Per Cent

Microsoft has posted better-than-expected Q2 financial results, although its Windows division fell short of expectations amidst slow PC sales.

The software giant reported a 30 per cent fall in sales for its Windows PC operating system, raking in $5.054 billion and falling short of the $5.3 billion forecast by analysts.

A drop in sales of Windows software is being attributed to the slow PC market, which grew by only 3 per cent during the quarter. As Microsoft relies on PCs for the sale of its Windows software, analysts fear that Windows sales will deteriorate further with the PC market falling prey to the rise in the popularity of tablet PCs and smartphones.

But sales of Microsoft's popular Kinect and Xbox 360 console boosted the company's revenue to $19.9 billion, a 5 per cent increase.

The company's entertainment division, which comprises of Kinect and Xbox, posted a revenue of $3.7 billion, 55 per cent higher, while profits rose by 83 per cent to $679 million.

Peter Klein, chief financial officer at Microsoft, said during a conference call with analysts: “We are enthusiastic about the consumer response to our holiday lineup of products, including the launch of Kinect. The 8 million units of Kinect sensors sold in just 60 days, far exceeded our expectations.”