With an expected charge of more than $1 billion for related to Xbox hardware issues, plus its $6 billion to purchase online ad agency aQuantive hanging over it, Microsoft (Nasdaq: MSFT) can still afford it all: profits were up 7 percent, hitting $3.04 billion, or 31 cents a share, in Q2, compared to $2.83 billion, or 28 cents a share, the year before. Revenues rose 13 percent to $13.4 billion. For the entire year ending June 30, 2007, Microsoft said revenues surpassed $50 billion, a 15 percent increase over the previous year.

—Looking ahead to the next quarter, the Redmond, Wash.-based company said it expects revenue to be in the range of $12.4 billion to $12.6 billion. For the entire year ending June 30, 2008, the company foresees revenue ranging from $56.8 billion to $57.8 billion.

—Also for Q3, Microsoft’s operating income is projected to fall within $5.0 billion and $5.2 billion. More to come. Earnings release | Webcast