generated $20 million net income.

Overall net income for the quarter was $3.65 billion, an increase of 5 percent over last year's $3.46 billion for the same quarter, according to Microsoft.

Thanks to its record revenue of $101 million, the Mobile and Embedded Devices segment finally generated positive net income, contributing $20 million to Microsoft's bottom line, as compared with a loss of $12 million in the same quarter last year.

Microsoft's Mobile and Embedded Devices segment revenue grew 40 percent year-over-year


. . . and returned positive net income

The Home and Entertainment division reported a quarterly loss of $293 million on revenue of $1.56 billion. In the same quarter last year, the division had a $55 million profit on revenue of $1.37 billion.

Microsoft says it returned over $8.5 billion to shareholders in the form of dividends and share repurchases during the quarter.

"The growth in our core businesses was healthy during the quarter driven by strength in Server and Tools and the success of our Windows Client products in a robust PC market," said Chris Liddell, chief financial officer of Microsoft. "The quarter also marked the beginning of an important product cycle for Microsoft with the launches of Xbox 360, SQL Server 2005, Visual Studio 2005 and Microsoft Dynamics CRM 3.0, all of which were extremely successful and well received by our customers."

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