Microsoft said yesterday that fourth-quarter sales grew from a year ago thanks to increased sales of its Windows and Office software products, but the company wrote off loses due to sour investments, which cut into profits.
For its fiscal fourth quarter ending June 30, Microsoft reported revenue of $US7.25 billion, a 10 per cent increase over its reported $6.58 billion in revenue for the fourth quarter of fiscal 2001, the company said in a statement.
Net income was $1.53 billion, or $0.28 diluted earnings per share, after accounting for an $806 million charge from investment losses that hacked $0.15 from the company's earnings per share. For the same quarter in 2001, net income totalled $65 million, or $0.01 per share. Those figures were reduced by a $2.63 billion investment charge that cut $0.47 per share from its earnings, Microsoft said.
A consensus of analysts had expected Microsoft to earn $0.42 per share on revenue of $7.08 billion for the quarter, according to Thomson Financial/First Call. That estimate didn't take into account charges for investment write-downs.
Microsoft in April offered guidance that it would report revenue in the range of $7 billion to $7.1 billion for the quarter, with diluted earnings per share of $0.41 or $0.42, chief financial officer John Connors said at the time.
Analysts had been expecting Microsoft to show a boost in sales of its desktop software and operating system licences due to a change in policy being ushered in. Microsoft set a deadline of July 31 for customers to switch to its new License 6.0 bulk licensing plan and still receive discounts for the move. Customers who do not switch to the new plan by the deadline date will have to pay the full price of their next Windows and Office upgrades, rather than receiving discounted upgrade prices.
Revenue from the sale of desktop software was $4.97 billion, compared to $4.55 billion in the fourth quarter of 2001. That gain was driven by increased sales of both its Windows operating system and Office software, the company said.
Revenue is expected to be in the range of $7.0 billion and $7.1 billion for the fiscal first quarter 2003. Diluted earnings per share is expected to be about $0.42 or $0.43, Microsoft said.