Microsoft (NASDAQ:MSFT) has reported record third quarter earnings off the back of increasing sales of operating system Windows 7.

Microsoft booked a record $14.50 billion in earnings for the quarter to March 31, up 6% from the same quarter of 2009. Operating income came in at $5.17 billion, net income at $4.01 billion earnings per share at $0.45, up 17%, 35% and 36%, respectively over the same quarter of 09.

The quarter was around, or slightly ahead of market expectations of $0.42-$0.45 a share.

Microsoft has thrown off the failure of Vista before it, with Windows 7 sales driving OS revenue up 28%. Microsoft notes that 10% of all PC’s worldwide now run Windows 7, leaving the door open for further growth in sales as corporate IT departments make the switch.

Following a stellar result from Apple earlier in the week, the market wasn’t particularly excited by the MSFT earnings, with shares dropping 3.54% to $30.24 in after hours trading.

Microsoft Reports Record Q3 Earnings is a post from: The Inquisitr

Analysts have already started downgrading performance of MSFT stock in light of the economic conditions. The latest downgrade Friday from Citigroup’s Brent Thill said that “the slowdown that the company saw in October intensified into November and continued into December.” Thrill predicted revenue for the June 2009 fiscal year of $62.5 billion, up just 3%, and below the company’s guidance for 7%-10% growth.

Rumors of job cuts at Microsoft have been circulating for some time, with the latest set of rumors comes from Mini-Microsoft, the anonymous Microsoft employee who has had a strong track record of getting rumors right in the past.

According to Mini-Microsoft, some small scale cuts have already taken place, including the disbanding of product groups, and strange staff meetings have taken place in the last week that some are suggesting are preparation for cuts to come.

Cuts at Microsoft would follow broad sweeping cuts among most of its primary competitors, including Sun, Oracle, and Yahoo. Google is said to be cutting contractors, and has made no official statement confirming broader cuts.

Microsoft Rumored to be Preparing Large Scale Jobs Cuts is a post from: The Inquisitr