MICROSOFT reported that its profits surged 23 per cent in the freshly-ended fiscal quarter with help from hot-selling 'Halo 3' videogame and its new Windows Vista and Office software.

The US technology giant said net earnings in the quarter ending on 30 Sept were US$4.29 billion (S$6.25 billion), or 45 cents per share, as compared to US$3.48-billion, or 35 cents per share, in the same period last year.

The results topped analysts' expectations of 39 cents per share and Microsoft's stock price climbed more than two percent to a penny shy of US$32 in after hours trading.

'This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999,' said Microsoft chief financial officer Chris Liddell.

The quarter includes the rock-star-like debut of 'Halo 3', designed exclusively for play on Microsoft's Xbox 360 consoles. Microsoft not only cashed in on the game software but is seeing a boost in Xbox 360 sales due to the buzz surrounding the must-have title, according to analysts.

Microsoft's first quarter also benefited from sales of its new Vista operating system and 2007 Office software, which were not available in the same quarter of last year. Microsoft said it expects revenues of US$15.6 billion to US$16.1 billion in the coming quarter, which includes the prime year-end holiday shopping season.

The company raised its estimate of how much money it might make by the time its fiscal year ends on 30 June 2008. Microsoft says profits could climb to $1.81 per share on revenues of $59.7-billion.