Microsoft Profits Up 5%Net income for the quarter was $3.7 billion, and revenues for the quarter hit a record $12 billion, up 9 percent over the previous year. “The growth in our core businesses was healthy during the quarter driven by strength in Server and Tools and the success of our Windows Client products in a robust PC market,” said Chris Liddell, CFO of Microsoft. “The quarter also marked the beginning of an important product cycle for Microsoft with the launches of Xbox 360, SQL Server 2005, Visual Studio 2005 and Microsoft Dynamics CRM 3.0, all of which were extremely successful and well received by our customers.” The Home and Entertainment division - the one that houses Xbox operations - lost $293 million, compared to a $55 million profit during the same quarter the previous year. Revenue for the division was reported at $1.6 billion for the quarter, compared to $1.4 billion a year earlier. Operating income declined 2 percent from the same time last year to $4.7 billion, thanks in large part to Xbox 360 launch-related expenses. Revenue for the next quarter ending March 31, 2006 is forecasted between $10.9 billion and $11.2 billion. Microsoft expects 2006 revenue for the fiscal year ending June 30, 2006 to be between $44 billion and $44.5 billion. The report is good news for concerned investors and analysts who earlier this week expected weak Xbox 360 and PC demand to significantly hinder earnings.