Microsoft Reports Strong Third Quarter



Strong sales of Office applications and Windows NT led Microsoft to report better-than-expected earnings for its fiscal third quarter. For the period ended March 31, Microsoft posted $4.33 billion in revenue, compared with $3.77 billion for the third quarter last year. Net income was $1.92 billion, or 35 cents per share, vs. third-quarter net income of $1.3 billion, or 25 cents per share, last year.

Microsoft CFO Greg Maffei says the company will remain guarded about growth for the fiscal year, as companies may reduce spending as the year 2000 approaches. Microsoft, however, frequently cautions about revenue slowdowns. But when it comes to PC sales, Maffei says, the company has not felt the slowdown that is affecting many of its rivals. "Though we're less dependent on PC shipments than we were a few years ago, we're still highly dependent on PCs," Maffei says.

By product group, Microsoft's platforms division generated $2 billion in revenue, compared with $1.6 billion for the same period last year. Applications and tools brought in $1.93 billion this quarter, versus $1.87 billion last year. According to Jerry Masters, senior director of planning and reporting at Microsoft, "SQL Server 7 revenue was phenomenal, and Standard Server sales jumped 50%." Sales of Office 2000 were not included in this quarter's report.

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