Microsoft's Profits Good, Not Great - The UpStream

Microsoft announced their quarterly numbers on Friday and they were pretty good. They posted a profit of $165 million for the quarter, due in large part to the Entertainment and Devices Division which is responsible for Xbox and Zune.

The console saw a slip of 12 percent on sales, however the cost of production was down and they saw record usage of the Xbox Live platform, more than covering the sales losses. Total sales were $14.5 billion, which is a 6 percent increase over this quarter last year. Some of that is because of a recovering global economy and part because of increased sales of Windows machines and Windows software because of Windows 7.

Despite sales increases and good profit numbers, Microsoft's stock still fell 4.5 percent. The market had hoped for a little better this quarter.

They had strong results, but the expectations from investors were higher. This was a sign that we probably need to be a little more realistic, and that things are moving slower than you would believe by the recent euphoria.