Microsoft made a slight profit in its most recent quarter despite Xbox 360 woes which cost the company $1bn.

The Xbox 360 developer revealed earlier this month that it would take an earnings charge of over $1bn as a result of an "unacceptable number of repairs to Xbox 360 consoles”.

But Microsoft reported net income of $3.04bn in its fourth quarter compared to net income of $2.83bn for the same period last year. Revenue for the quarter was up 13 percent at $13.37bn, compared with revenue of $11.8bn for the same period last year.

Microsoft attributed revenue growth to demand for its new client OS Windows Vista, as well as business products such as SQL Server and Windows Server. Microsoft's Visual Studio developer tools and Xbox360 consoles also did well in the quarter, the company said.