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  Microsoft's X-Rated Problem
Time: 09:24 EST/14:24 GMT | News Source: The Motley Fool | Posted By: Byron Hinson

Go over last night's third-quarter earnings report from Microsoft and you'll be treated to the usual suspects. It topped profit projections by a penny per share. It was guarded in its near-term outlook. All of its operating divisions managed small yet definite gains. Wait a minute. Scratch the latter. While Microsoft managed modest gains in most of its businesses, one line item stands out like a Mac user at a Bill Gates Fan Club meeting. Its Home and Entertainment division suffered a steep 42% drop during the period. How can a company manage to grow revenue in iffy segments such as software and online subscriber services but fail to make headway in something as seemingly recession-resilient as home and entertainment?
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