Mayhem in markets but Microsoft still makes money

San Francisco: Microsoft Crop. reported its first-quarter results that exceeded analysts' expectations, with profits up 2 per cent to $4.37 billion.

Sales rose 9.4 per cent to $15.1 billion in the quarter that ended Sep 30, the company said in a statement on Thursday, spurred by the demand for Office programmes and the Xbox video game console.

The world's largest software maker said sales for the full fiscal year, ending June 30, 2009, would be between $64.9 billion to $66.4 billion.

"In a challenging economic environment, the first-quarter results exhibit the strength and diversity of our business model," said Microsoft's chief financial officer, Chris Liddell.

The company plans to save $500 million by slowing down on hiring, travel and marketing, Bloomberg financial news reported. Microsoft can endure an economic slowdown longer than its competitors because it has many clients with long-term contracts.

Revenue in the Microsoft Business Division, mainly Office programmes, climbed 20 per cent last quarter to $4.95 billion. Xbox sales dipped 6 per cent, but this was less than the 26-per cent decline the company had forecast.