Microsoft last night said its profit for the latest quarter rose 11% from a year earlier to just over $3 billion, boosted by the new Windows Vista operating system and the new Office software suite.

The world's biggest software company said profits in its fourth financial quarter were dented by funds set aside to repair or replace flawed Xbox gaming consoles, subtracting $749m from net profit.

Revenues for the three months to June 30 increased 13% to $13.37 billion. The increase was fuelled by the introduction earlier this year of Vista, the latest version of the Windows system used on an  overwhelming majority of personal computers worldwide, and the 2007  Microsoft Office software package.

Excluding once-off items, the profit amounted to 39 cents per  share, in line with Wall Street forecasts.

For the full fiscal year, Microsoft posted a net profit of $14 billion on revenues of $51 billion.

Microsoft announced earlier in July it expected to spend more than $1 billion fixing flawed Xbox 360 video game consoles after logging what it called 'an unacceptable number of repairs'.