We are very pleased with this quarter's
results, which came in as expected reflecting
solid customer demand from around the
world, particularly in Asia," Chief Financial
Officer John Connors said in a statement,
adding that Office 2000 and SQL Server 7.0 "continued to perform
strongly."
But Mr. Connors sounded a note of caution -- something analysts and
investors got used to hearing from his predecessor, Greg Maffei -- saying
that Microsoft experienced "slowing demand for business PCs during the
quarter." (Notice how the reporter didn't fail to qualify the CFO.)
Mr. Connors said the company remains "cautious in our expectations for
near-term PC demand and corporate software spending, and continue to
anticipate moderate revenue growth through the remainder of fiscal 2000."
As of Dec. 31, Microsoft reported deferred, or unearned revenue of
$4.26 billion, compared with $4.24 billion for the period ended June 30.
That number was important this time around because deferred income
declined $110 million sequentially in the September quarter to $4.13
billion. Analysts were on guard for another such decline, but it didn't come.
Revenue from Windows platforms, meanwhile, climbed to $2.44 billion
from $2.3 billion a year ago.
Analysts hadn't been expecting a blowout quarter, but they also weren't
expecting the kind of down period some investors thought was in the cards
two weeks ago. Then, rumors swept Wall Street that the software giant,
which has consistently exceeded expectations, would forecast an earnings
disappointment. But analysts were quick to dismiss the scuttlebutt and no
preannouncement ever came.
While the second quarter is traditionally a strong one for Microsoft,
analysts think Microsoft has a better chance of turning in "blowout"
performances in the September and December quarters, following the
adoption of Windows 2000, which launches Feb. 17.
The earnings report came at a time of tumult for the world's largest
software company. Microsoft filed its proposed "findings of law" in the
ongoing antitrust case brought against it by the U.S. Justice Department
and 19 states late Tuesday. And last week, Chairman Bill Gates stepped
down as chief executive, saying he will devote his time to helping develop
what he called "next-generation Windows services." Mr. Gates, who took
on the new title of chief software architect, handed over day-to-day
operations of Microsoft to longtime lieutenant and friend Steve Ballmer,
who remains the company's president. |
