6:00PM Microsoft Corp reports annual revenue above $50 billion on higher cost of revenue.

Microsoft Corp fourth quarter earnings were hurt by $1.06 billion charge to fix damaged Xbox 360 game player. The total loss in the game player business has exceeded $5 billion in the last four and a half years.

Microsoft (MSFT: chart) fourth quarter earnings were reported at $3.06 billion from $2.83 billion a year ago, a rise of 7.3%. The earnings per share in the quarter jumped to 31 cents from 28 cents a year ago. The revenue in the quarter gained 13% to $13.38 billion from $11.8 billion.

For the year ending in June 30, 2007, Microsoft reported revenue of $51.12 billion, a rise of15% from a year ago. Microsoft record revenue crossed $50 billion mark for the first time on new operating systems and suite of productivity software. For the year cost of revenue jumped to 21% from 17% a year ago.

The company sales were driven a released of new PC operating system Vista and Office 2007 in January of this year. The company also released new server software and a host improvement to its Internet properties.

Client unit which includes Windows, jumped 14% to $3.81 billion and Business unit which includes Office software suite, jumped 19% to $4.63 billion. Sales in the Xbox division dropped 9.5% to $1.16 billion with a sale of 11.6 million units missing the target of 12 million units.

For the current quarter the company forecasted earnings between 38 cents and 40 cents and revenue between $12.4 billion and $12.6 billion. The company tightened the earnings estimate between $1.69 and $1.73 per share on revenue for the year between $56.8 billion and $57.8 billion.

The company fourth quarter earnings have ranged between 14 cents and 34 cents in the years 2001 and 2007.