'Revenue of over US$16 billion this quarter exceeds our previous record by two billion,' said Microsoft chief financial officer Chris Liddell.

'We are extremely pleased by the broad-based strength of our business performance and field execution.'

Microsoft said its net income for the quarter climbed to US$4.7 billion, or 50 cents per share, as compared with US$2.6 billion, or 26 cents a share, in the same period a year earlier.

The earnings topped expectations by Wall Street analysts that forecast Microsoft would pull in 46 cents per share on just shy of 16 billion dollars in revenues in the final quarter of 2007.

Microsoft credited its new Windows Vista operating system released a year ago with lifting sales in the business and personal computer sectors.

'We are pleased with the progress of Windows Vista in the market,' said Microsoft platforms and services division president Kevin Johnson. 'We've hit our stride with partners and customers.'

Demand for Microsoft software including Office, Sharepoint, Exchange, and Vista remain strong, according to the US software giant.

'We are in the midst of another strong year with great momentum heading into calendar year 2008,' said Microsoft chief operating officer Kevin Turner.

'We continue to see healthy demand from both businesses and consumers in the United States and our growth in emerging markets is especially strong.'

Among Microsoft offerings rolled out in the last quarter of 2007 were its Zune MP3 player and the Zune online marketplace selling music and video for the devices.

Microsoft also reported a jump in sales of its Xbox 360 video game consoles during the year-end holiday shopping season. Microsoft says it has sold 17.7 million of the consoles since they debuted in November of 2005. -- AFP