Microsoft profits fall on legal costs and fine

Microsoft last night reported higher quarterly revenue, driven by strength in the personal computer sector, as overal IT global spending continued to grow.

Revenue for its third quarter to the end of March was $9.2bn (€7.7bn), up 17% on the same period a year earlier and ahead of expectations.

However, quarterly profits dropped more than 38% because of the costs of a legal settlement with Sun Microsystems, an antitrust fine imposed by the EU Commission and changes in the way it compensates employees.

Net profits were $1.3bn (€1.09bn), compared with $2.1bn (€1.76bn) in the same period a year earlier.

But the company pointed to steady growth in its core businesses, including sales of the Windows operating system, as a sign of continued strength.

Contributing to the strong result was the company's MSN Internet division, which posted a quarterly profit for the second time in its history.