Microsoft Revenue Jumps 13 Percent

By Peter Galli  |  Posted 2002-04-18 Print this article Print

Microsoft Corp. on Thursday reported $7.25 billion in revenue for its third quarter, which ended in March—a 13 percent rise from the same quarter a year ago—a result that its chief financial officer John Conners said "exceeded our expectat

Microsoft Corp. on Thursday reported $7.25 billion in revenue for its third quarter, which ended in March—a 13 percent rise from the same quarter a year ago—a result that its chief financial officer John Conners said "exceeded our expectations." But he cautioned that while PC growth rates for the current quarter were expected to be slightly improved, "our expectations for enterprise IT spending levels continue to be quite modest."
The Redmond, Wash., software firm said operating income rose to $3.3 billion in the quarter from $3 billion the previous year, with quarterly net income coming in at $2.74 billion. This included an $847 million after-tax gain on the sale of Expedia and an $806 million after-tax charge related to investment impairments, the company said in a statement.
Revenue from desktop applications edged up slightly to $2.44 billion in the March quarter from the $2.41 billion reported last year. But revenue from its flagship desktop productivity suite, Office, fell from the comparable quarter a year before. But desktop platform sales were strong "on the strength of Windows XP—both in the enterprise and in the home," Connors said. "We also took another big bite out of costs this quarter, with single-digit operating expense growth driving costs down and efficiency up throughout the entire organization." Sales of Windows XP boosted desktop platforms revenue growth of 11 percent, with sales of Windows 2000 Pro and XP Pro, the business versions of Windows, accounting for 47 percent of all operating systems sold this quarter, up from 35 percent in the prior year, Microsoft said. "This quarter Windows XP shipped on nearly 60 percent of all new PCs, which represents a faster penetration than any of our previous operating systems, said Jim Allchin, Microsofts group vice president of the Platforms Division. Microsoft also said that since the February launch of Visual Studio .Net and the .Net Framework, more than 1 million units had shipped to developers worldwide. Conners said Microsoft expected revenue of between $7 and $7.1 billion in the current quarter, which ends in June, with operating income expected to be in the range of $2.9 and $3.0 billion.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel