Revenues for the quarter rose from $5.76 billion last year to $5.8 billion.
"We are satisfied with the current quarter's financial performance," Microsoft CFO John Connors said in a conference call. His words were a far cry from his comments on the same phone call last quarter, when he surprised analysts with warnings of slowing corporate PC sales.
The company reported revenue of $22.96 billion for the entire fiscal year that ended June 30, up 16 percent from revenue of $19.75 billion for the previous year. Net income for the year totaled $9.42 billion, vs. $7.79 billion for the previous year.
The company reported earnings of 44 cents per share, up 10 percent from 40 cents per share for the same quarter last year. Microsoft announced quarterly earnings of $2.41 billion on revenues of $5.8 billion, compared with $2.2 billion and $5.76 billion, respectively, for the same period last year.
Microsoft pointed to growth in Asia and its consumer business. The company remains guarded about near-term growth rates in business PC sales but has high hopes for sales of Windows 2000 products.
Last quarter, Connors warned analysts and investors that corporate PC sales were recovering from Y2K spending freezes more slowly than expected and that this softness was exacerbated by components shortages.
This quarter's PC shipments came in the "midteens," Connors said, with business PCs in the "high single digits."
"Demand for business PCs softened in May and strengthened at the end of the quarter," he added. "The hangover effect of Y2K was a first-quarter phenomenon, and maybe a little bit in the second quarter."
Strong corporate sales of its Windows 2000 operating system drove fourth-quarter earnings, the company said, citing customer wins with Xerox, Motorola, and Royal Dutch/Shell. Microsoft also said that PC makers Compaq Computer, Dell Computer, Hewlett-Packard, IBM, and Toshiba are also deploying the new OS internally.
Sales of the Windows products, which includes Windows 98 and the Windows 2000 family of operating systems, grew from $2.25 billion in the fourth quarter last year to $2.37 billion this quarter, Microsoft said.
Despite the growth in Windows sales overall, sales to big companies was still soft, the company said. Microsoft said the slowdown was due to buyers waiting for Windows 2000's debut this summer instead of purchasing an older release of Windows. Microsoft is set to release the service pack for Windows 2000 this week. The high-end Windows 2000 Data Server is set for release this summer, and Windows Me, the next version of Windows 98, is expected by September.
As expected, the desktop applications group, which oversees the Office products, and server applications like SQL and Exchange server software, saw its sales decline from $2.93 billion in the fourth quarter of last year, to $2.64 billion this quarter. Last year at this time, the company was riding the wave of $200 million worth of Office 2000 coupon redemptions, which boosted revenues for the period.
Revenues for the consumer division, which includes MSN, hardware, and consulting and training groups, grew 34 percent to $796 million.
Overall fiscal year sales of Windows topped $9.38 billion, up from $8.5 billion a year ago. For the year, desktop applications rose to $10.47 billion, from $8.82 billion, and consumer division sales rose to $3.11 billion from $2.43 billion.
Microsoft's MSN online service and portal saw its subscriber base grow 20 percent to 3 million during the fourth quarter, the company said.
The company's recently announced .Net initiative to drive Web-based applications and connected devices will not have an impact, other than research and development dollars, on Microsoft's bottom line this fiscal year, Connors said. Research dollars will also go to the company's wireless and mobility groups, the Xbox game console and TV initiatives, he said.