Despite continuing reports of consumers and businesses holding off on upgrading to Vista, Microsoft turned in one of its most impressive financial performances in years bolstered by sales of its latest operating system and the launch of Halo 3. The software giant posted a massive 27 percent year-on-year increase in first quarter revenues over 2006, making it the fastest start to a fiscal year Microsoft has had since 1999.

Microsoft said it took in $4.29 billion in profits on revenue of $13.76 billion for the three months ending September 30. Its client division, which includes the Windows operating system, grew sales by 25 percent to $4.14 billion, edging out the $4.11 billion in revenue from the Microsoft Business Division where Office is produced. The company did not release growth figures for Windows Vista, but talked it up anyways:

"Customer demand for Windows Vista this quarter continued to build with double-digit growth in multi-year agreements by businesses and with the vast majority of consumers purchasing premium editions."
Meanwhile the firm's entertainment and devices arm posted a 91% increase in revenue, to $1.9 billion, with its highly-regarded "Halo 3" title contributing about $300 million to the division's revenue in the period. Of Microsoft's five business units, only one was not profitable in the quarter. Its online services business posted an operating loss of $264 million, despite a 25 percent increase in revenue.