To: Jenna who wrote (51327 ) 7/20/1999 1:40:00 AM From: kha vu Respond to of 120523
MSFT: Microsoft Profits Rise 62%, Slower Growth Seen Ahead Get Quote, Company Info: MSFT By Martin Wolk Reuters SEATTLE (July 19) - Microsoft Corp., the world's biggest computer software company, Monday reported earnings rose 62 percent in its fiscal fourth quarter, well ahead of analyst expectations. Microsoft warned, however, that revenue growth would slow in the current fiscal year due to slowing demand for computers and worries about the Year 2000 computer bug, sparking a decline in its stock in after-hours trading. Microsoft posted net income of $2.2 billion, or 40 cents per diluted share, compared with $1.357 billion or 25 cents a year earlier. Analysts on average had expected earnings of 36 cents a share, according to First Call. Microsoft stock, which lost $1.06 to $98.38 in regular Nasdaq trading before the earnings announcement, fell to $97.56 in after-hour activity. Revenues rose 39 percent to $5.76 billion for the quarter that ended June 30, capping a fiscal year that saw the software giant fall just short of the $20 billion mark in annual sales. Microsoft Chief Financial Officer Greg Maffei credited strength in the company's core Windows and Office software for the solid results. But he warned that profit margins have peaked and said revenue growth would slow in fiscal 2000 from the 29 percent rate posted in the year just ended due to slowing demand for computers, uncertainty surrounding the Year 2000 computer bug, and uncertain global economic conditions. ''However, in fiscal 2000 our revenue growth rates will decline due to slowing PC demand, uncertainty surrounding Y2K, and uncertain global economic conditions, and we will not see further margin expansion,'' Maffei said in a statement. Maffei also said the company had seen continuing strong sales of its software for back-end server computers, and the company said the its high-end Windows NT operating system is now installed on more than 37 million computers, more than double year-earlier levels. Redmond, Wash.-based Microsoft said revenues from applications and developer products rose 48 percent to $2.93 billion in the fourth quarter, driven by the launch of its Office 2000 suite of products. ''Microsoft Office 2000 has resonated with large and small customers alike, and is off to a very strong start,'' Bob Muglia, senior vice president of Microsoft's Business Productivity Division, said in a statement. Revenue from Windows products, including Windows 98 and Windows NT, rose 32 percent to $2.25 billion, the company said in a statement accompanying its earnings release. Fourth-quarter revenues rose 48 percent to $2.36 billion in the Americas and South Pacific, its biggest regional channel, again reflecting the launch of Office, the company said. Revenues from computer makers rose 27 percent to $1.64 billion. Microsoft ended the year with $17.2 billion in cash, up from $13.9 billion a year earlier. But its equity and other investments rose to $14.4 billion, including a $5 billion investment in AT&T Corp., compared with a total of $4.7 billion a year earlier. For the full 1999 fiscal year, Microsoft reported net income of $7.79 billion, or $1.42 a diluted share, vs. $4.49 billion, or 84 cents in fiscal 1998. Revenues rose to $19.75 billion from $15.26 billion. 17:33 07-19-99