Microsoft Q2 earnings soar 74 per cent

Strong growth in PC shipments combined with software purchases made in preparation for expected year 2000 problems helped push Microsoft Corp.'s revenue and income to record levels in the second quarter of fiscal year 1999.

Net income for the quarter, ended Dec. 31, was US$1.98 billion or 73 cents per diluted share, up 74 per cent from 42 cents per share a year ago. The results soundly beat the expectations of 23 brokers polled by First Call Corp., who produced a consensus estimate of 59 cents per share for the quarter.

Revenues totalled $4.94 billion, a 38 per cent increase over the $3.59 billion a year ago.

However, Microsoft is guarded about growth in 1999 because of the "uncertain international economic outlook," and because organisations are likely to scale back spending on software not related to solving expected year 2000 difficulties, said Greg Maffei, chief financial officer, in a statement.

Sales of Microsoft Office, SQL Server and Exchange all reached new highs for the quarter, with shipments of all server applications nearly doubling in the past year. Sales of Microsoft Exchange Server set a new record, shipping 4.5 million client access licenses in the quarter, Microsoft said.

Microsoft Corp., in Redmond, Washington, is on the Web at http://www.microsoft.com/.

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James Niccolai

PC World

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