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San Francisco - Microsoft is expected to post strong profit and sales increases when it reports fiscal first-quarter results next on Thursday, aided somewhat by its popular new Halo 3 video game release.
Analysts polled by Thomson Financial estimate that Microsoft will post earnings of 39c a share for the period ended in September, and $12.6bn in revenue.
Both profit and sales figures would represent double-digit percentage gains over the numbers Microsoft posted for the same period a year earlier.
Analysts will be focusing on certain highlights, including contributions from the company's Halo 3 title for its Xbox video game system. Halo 3 was released September 25, shortly before the quarter's close, and netted over $300m in sales during its first week of availability.
According to data released on Thursday by NPD Group, sales of Halo 3 helped propel better-than-anticipated overall video game sales in September, while helping sell some 527 800 Xbox units during the period, almost double the number of units sold in August.
Halo a big help
Bear Stearns analyst John DiFucci said in a note released to clients earlier this week that he anticipates Halo contributed $215m to Microsoft's first-quarter revenue, and a penny in earnings per share.
DiFucci has a peer perform rating on Microsoft stock.
Microsoft's shares have risen more than 5% in the past six months. The shares rose slightly on Thursday, closing at $31.16.
Entertainment and devices such as Xbox constitute a relatively small portion of Microsoft's quarterly revenue, while its Windows operating system software and Office applications generally make the heaviest contributions.
Microsoft made headlines in September, when it announced that it would extend the availability of XP, the predecessor to the company's new operating system released to consumers in January, called Vista. That move was perceived by some to be a response to poor acceptance of Vista, which is a key focus for analysts trying to gauge the company's health.
But Pacific Crest Securities analyst Brendan Barnicle wrote in a note released earlier this month that Microsoft has been benefiting from "better PC sales and more-rapid adoption of Vista." Microsoft's Office 2007 suite of applications has also performed well, Barnicle said.
Barnicle estimated Microsoft will post earnings of 41c a share for the quarter, ahead of general estimates. He has a sector perform rating on Microsoft stock.
In addition, Barnicle said, Microsoft's acquisition of online advertising company aQuantive for $6bn closed "earlier than expected," and may have added $50m in revenue during the first quarter, alongside $95m in expenses.
- Dow Jones