Greg Maffei, Microsoft's chief financial officer, said in a telephone
interview that these two special items essentially canceled each other out
in terms of earnings per share.
Maffei said the well-known problems
of PC vendors like the Compaq
Computer Corporation or I.B.M. did
not reflect weakening demand over
all. Microsoft, whose Windows 98
program runs on 90 percent of new
personal computers, saw a 29 percent
increase in sales of operating systems and applications preinstalled on new
computers. Most of this was due to increased PC shipments, but some was
due to a shift to Windows NT, which costs more, and more application
sales, he said.
"Not to speak ill of our partners, but I think they had their own operational
ills in each case that do not speak to the overall health of the market,"
Maffei said. "A few highly visible guys might have had less than stellar
results, but I don't think that speaks to overall demand. There was a lot of
talk that the PC market is in deep decline, but we didn't see that," he said.
Microsoft expects PC shipments to grow 16 percent to 17 percent, he
said.
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