Microsoft quarterly profits beat expectations as Windows sales rise by four percent

Washington -  Microsoft's profits in the three months till the end of March have dropped slightly but the results still beat analysts' expectations after a surprise rise in sales of its Windows operating system.

The world's largest software firm made a net profit of 5.11 billion dollars, as compared with 5.23 billion dollars in 2010.

Windows sales rose by four percent against forecasts of a four percent decline, though sales at its entertainment division, which includes the Xbox console, fell by 16 percent.

Its business division saw revenues increase by nine percent "reflecting the continued strength of Office 2010", the company said.

Brendan Barnicle, analyst at Pacific Crest Securities, said the results looked good.

"Particularly good was the Windows business, which grew about four percent, more than PC industry growth. In the last few quarters, Windows has been growing less than PCs overall," he said.

"It's not clear yet what drove this change, but it could be that the negative impact on PCs from tablets has peaked. The Office business was particularly strong too, which is encouraging,” he added.

The company also noted that the results for the same quarter a year ago had been boosted by a 461 million dollar tax benefit.