CNET también está disponible en español.

Ir a español

Don't show this again

Uber wins new London license Second stimulus check payment schedule TikTok ban delay PS5 preorders Amazon Luna Animal Crossing: New Horizons fall update Amazon showcase

Microsoft earnings elude PC pressures

The company reports a 40 percent increase in earnings over the corresponding quarter a year ago.

Even as the computer market struggles with increasingly vicious price wars, Microsoft continued to rake in profits today with a 40 percent increase in earnings over year-ago levels.

The Redmond, Washington-based software firm posted third-quarter earnings of $1.92 billion, or 35 cents per share, beating Wall Street expectations by 3 cents. That compares with earnings of $1.34 billion, or 25 cents per share, for the same period a year ago. A consensus of analysts' estimates had pegged the company?s quarterly earnings at 32 cents per share, according to First Call.

The company posted revenue of $4.33 billion for the quarter, a 15 percent increase over last year?s $3.77 billion.

The latest quarter of profits comes amid a period turmoil in the PC market. Close ally Compaq Computer, reeling from a disappointing quarter, showed its chief executive the door in a surprise announcement Sunday.

The Houston PC maker's woes follow recent news of a widespread reorganization within another PC giant, Hewlett-Packard, as well as increasing Wall Street concern about high-flyer Dell Computer, a computer manufacturer that once seemed immune to PC market changes.

But where hardware manufacturers continue to wage a vicious price war, Microsoft has remained on the sidelines, continuing to collect on each sale of a PC that includes a version of its Windows operating system. Today, the company called the PC market "fundamentally healthy." (See related story)

"Pricing pressure in the PC industry has very little impact on prices that Microsoft obtains from its customers," noted a recent report from PaineWebber analyst Don Young.

Microsoft reported $2.05 billion in revenue from its platforms group, consisting of the company?s various operating system software, and $1.94 billion from its applications and tools group. The firm also reported $341 million in revenue from its interactive media group.

The quarter does not include $400 million in unearned revenue related to a Microsoft Office 2000 "technology guarantee" program, which will be accounted for in coming quarters. Microsoft also gained $350 million from investments in the quarter.

The firm?s performance today wasn't as stunning as its previous quarter, when it posted a 74 percent jump in profits and beat estimates by 14 cents, but it was another strong showing from the software giant. "Financially and operationally, it was a very nice quarter," said Greg Maffei, chief financial officer for Microsoft.

Executives said continued strong sales of the company?s Windows NT Workstation operating system, now with an installed base of 30 million licensees, and ongoing demand for the company?s Office suite of software drove revenue for the quarter. In addition, the latest version of the company?s database, called SQL Server, started shipping this quarter, resulting in a 50-percent increase in licenses of the product compared to the previous year.

The company continued a steady stream of product releases, including an update to its Internet Explorer Web browsing software. Also unveiled was a manufacturing release of an update to Office 2000, the latest version of the firm's personal productivity software package.

But the period may be best remembered for a rumored reorganization at Microsoft, one of the first significant moves since long-time executive Steve Ballmer was named as president.

The conservative management team said it remains "guarded" concerning 1999 growth, given looming year 2000-related issues that could stymie technology spending in the short-term.

From a geographic perspective, Maffei said results out of Asia--including Japan--were "much improved," while the European market "slowed" and performance in Brazil and Mexico was "generally poor."

The company also reported $21.8 billion in cash and short-term investments as of the end of March, up from $19.2 billion at the end of the previous quarter.

Microsoft stock ended the day up more than 2 percent in advance of the company?s earnings.

Microsoft continues to purr along at an operational level as the Justice Department's antitrust case against the firm is in recess until early summer. Reports of possible negotiations between the parties and the states represented in the case surfaced late last month.