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Microsoft Profits Fall Ahead Of Windows 8 Launch

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BALLMER
Microsoft CEO Steve Ballmer | AP

Google is not the only tech company whose stocks plummeted on Thursday.

Microsoft also suffered big losses - though they did at least release their reports when they intended too.

The tech giant said profits fell 22% in the three months to September, down from $5.74bn a year earlier to $4.47bn.

Revenues fell 8% to $16bn, and PC sales crashed as they waited for newer machines or switched to tablet devices.

The earnings missed analysts expectations, and led to a 3% fall in share price in extended trading. But Microsoft said that the lower earnings were mainly due to deferred revenue of around $1.36bn, ahead of the launch of its next-generation Windows 8 operating system.

The company cannot mark the revenue of PCs already shipped with Windows 8 until they actually go on sale on 26 October.

It has already shipped PCs with $783m in Windows 8 licence fees, and also deferred $384m in income for Windows 7 PCs shipped with cheaper upgrades to the new OS.

Alongside Windows 8 Microsoft is also preparing to launch its new 'Surface' tablets, which run an ARM-based version of the OS called Windows RT.

The Wall Street Journal claims Microsoft is hoping to sell between three and five million Surface devices in the next few months as it attempts to regain ground lost to Apple's iPad and cheaper Android-based tablets.

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