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. Last Updated: 07/27/2016

Microsoft Profits Leap 72%

SEATTLE -- Microsoft Corp. far outperformed analysts' estimates for its second quarter, racking up a 72 percent increase in profits as strong growth in personal computer shipments boosted demand for its software.

Microsoft reported Tuesday that it had net income of $1.98 billion and diluted earnings per share of 73 cents for the quarter ended Dec. 31, up from $1.13 billion or 42 cents a share a year ago. Analysts surveyed by First Call had expected 59 cents per share.

Revenues for the quarter were $4.94 billion, up 38 percent from $3.59 billion a year ago.

The quarterly profits and revenues were records.

"Every now and again, they have a quarter that really takes your breath away,'' said analyst Scott McAdams of McAdams Wright Ragen Inc. in Seattle. "Clearly, they beat the street, and handsomely.''

Microsoft's Windows operating system runs the vast majority of personal computers, and healthy sales during the holidays for new PCs, especially cheaper models aimed at home users, meant more money for Microsoft, Greg Maffei, Microsoft's chief financial officer, said in a conference call Tuesday.

Sales of Windows NT, an operating system for high-end workstations and computer networks, likewise were robust.

Microsoft has now licensed more than 25 million copies of the NT version for workstations, including 3 million new licenses in the most recent quarter.

Although Maffei said he expected Microsoft's financial performance to remain strong through its fiscal year that ends June 30, the company is worried about uncertainties in the Asian and Latin American markets as well as the effect of the Year 2000 computer bug.