Microsoft Reports Solid Second Quarter Financial Results on Record Quarterly Revenue
Thursday January 16, 4:49 pm ET
Company Announces Dividend and Two-for-One Common Stock Split
REDMOND, Wash., Jan. 16 /PRNewswire-FirstCall/ -- Microsoft Corp. (Nasdaq: MSFT - News) today announced revenue of $8.54 billion for the quarter ended Dec. 31, 2002, a 10 percent increase over revenue of $7.74 billion for the same period in the prior year. Operating income for the second quarter was $3.26 billion, including an additional $210 million charge reflecting the company's estimate of costs related to resolving pending state antitrust and unfair competition class action lawsuits. This compares to operating income of $2.84 billion reported in the second quarter of last year, which included a $660 million charge related to the company's estimate of the class action lawsuit costs.
(Photo: newscom.com )
Net income for the second quarter was $2.55 billion, including a $282 million after-tax charge ($421 million pre-tax) for investment impairments and a $126 million one-time tax benefit relating to a favorable tax court ruling, compared to net income of $2.28 billion in the prior year. Diluted earnings per share for the second quarter were $0.47, including a $0.03 charge related to the company's estimate of the class action lawsuit costs, a $0.05 charge for investment impairments, and a one-time tax benefit of $0.02 as noted above, compared to earnings per share of $0.41 in the prior year, which included an $0.08 charge related to the company's estimate of the class action lawsuit costs.
"The company delivered solid results in every business despite a challenging global economic environment. During the quarter we also launched a broad range of products and services, including MSN® 8, Tablet PC, Windows® XP Media Center Edition, Xbox Live(TM) and Windows Powered Smartphone," said John Connors, chief financial officer at Microsoft. "While we are very optimistic about the future of the technology sector, we do not expect to see a significant upturn in global IT spending in the short term."
Microsoft also announced today that its Board of Directors approved an annual dividend and a two-for-one common stock split. "Declaring a dividend demonstrates the board's confidence in the company's long-term growth opportunities and financial strength. We are especially pleased to be able to return profits to our shareholders, while maintaining our significant research and development efforts and satisfying our long-term capital requirements," Connors said.
Revenue from Server Platforms grew 12 percent in the second quarter, driven by strong performance across a breadth of server products including Windows 2000 Server and Windows 2000 Advanced Server. Customers acquiring Microsoft server software this quarter include the Coca-Cola Company, Ernst & Young LLP and Siemens. Despite the overall weakness in IT spending, Microsoft SQL Server(TM) 2000 posted strong growth of over 40 percent, driven by strong demand for SQL Server Enterprise Edition among companies deploying mission- critical applications.
Now available in all markets, Xbox(TM) turned in a strong performance for the holiday season, selling more than 8 million units since the product launched on Nov. 15, 2001. In November 2002, Xbox Live launched in North America, and in less than 60 days, more than 250,000 Xbox Live starter kits were sold, exceeding internal expectations. Three of the four best-selling Xbox titles are all Live-enabled, including "MechAssault(TM)" from Microsoft Game Studios, Tom Clancy's "Ghost Recon" from Ubi Soft, and "Unreal Championship" from Infogrames. According to NPD Data, more than 80 percent of customers who purchased the Xbox Live Starter Kit also purchased one or more of these games.
MSN experienced strong growth this quarter with an increase of over 40 percent in online advertising compared to a year ago, reflecting advertising alliances with customers such as Volvo and Lexus. Designed to give consumers advanced communication options, improved browsing and online safety features, MSN 8 earned the prestigious Good Housekeeping Seal, marking the first Internet software product ever backed by the seal.
Business Outlook
Management offers the following guidance for the quarter ending March 31,
2003:
-- Revenue is expected to be in the range of $7.7 billion and $7.8
billion.
-- Operating income is expected to be in the range of $3.4 billion and
$3.5 billion.
-- Diluted earnings per share is expected to be either $0.47 or $0.48.
Management offers the following guidance for the full fiscal year ending
June 30, 2003:
-- Revenue is expected to be in the range of $31.9 billion and $32.1
billion.
-- Operating income is expected to be in the range of $14.1 billion and
$14.3 billion.
-- Diluted earnings per share is expected to be in the range of $1.90 and
$1.93.
Microsoft Declares Annual Dividend and Announces Two-for-One Split On Common Stock
Thursday January 16, 4:48 pm ET
REDMOND, Wash., Jan. 16 /PRNewswire-FirstCall/ -- Microsoft Corp. (Nasdaq: MSFT - News) today announced that its Board of Directors declared an annual dividend and approved a two-for-one split on Microsoft common stock. The annual dividend of $0.16 per share pre-split ($0.08 post-split) is payable March 7, 2003, to shareholders of record at the close of business on Feb. 21, 2003. As a result of the stock split, shareholders will receive one additional common share for every share held on the record date of Jan. 27, 2003.
(Photo: newscom.com )
"Declaring a dividend demonstrates the board's confidence in the company's long-term growth opportunities and financial strength. We are especially pleased to be able to return profits to our shareholders, while maintaining our significant investment in research and development and satisfying our long-term capital requirements," said John Connors, chief financial officer at Microsoft.
Upon completion of the split, the number of common shares outstanding will be approximately 10.8 billion. The additional shares will be mailed or delivered on or about Feb. 14, 2003 by the company's transfer agent, Mellon Investor Services. This is the ninth time Microsoft's common stock has split since the company's initial public offering on March 13, 1986.
"We believe that the split, combined with an annual dividend, will make Microsoft stock even more attractive to a broader range of investors. We see enormous potential for growth in the software and technology sector, and remain committed to attracting investors who share this enthusiasm and take a long-term view of the company's growth opportunities," Connors said.
In connection with the dividend, the company is introducing a Direct Stock Purchase Program and a Dividend Reinvestment Program, offering both new investors and current stockholders the option of receiving Microsoft's annual dividend in cash or having it automatically reinvested. This program is administered by Mellon Investor Services, not by Microsoft. More information about the program and enrollment forms are available by calling Mellon Investor Services at 800-285-7772 (toll-free), contacting Mellon by e-mail at msft@melloninvestor.com, or visiting Mellon's Web site at melloninvestor.com .
Founded in 1975, Microsoft is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software -- any time, any place and on any device. |
