Microsoft Announces Record Quarterly Revenue and Income
THURSDAY, JANUARY 18, 2001 4:23 PM
- PRNewswire
REDMOND, Wash., Jan 18, 2001 /PRNewswire via COMTEX/ -- Microsoft Corp. (Nasdaq: MSFT) today announced record revenue of $6.59 billion for the quarter ended Dec. 31, 2000, an 8 percent increase over the $6.11 billion for the same quarter last year. Net income and diluted earnings per share were $2.62 billion and $0.47.
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"Strong customer demand for Windows(R) 2000 Professional, Windows 2000 Server, and our family of .NET Enterprise Servers drove the quarter's record results. We made outstanding progress against our competitors in building mission-critical business solutions for large enterprises," said John Connors, chief financial officer at Microsoft. "While we are enthusiastic about the break-through products and services the company will be delivering in 2001, we remain guarded about the near-term economic outlook and its impact on PC demand and technology spending."
Sales of the Windows family of operating systems reached record levels in the quarter, driven primarily by strong performances from Windows 2000 Professional and Windows 2000 Server. BP Amoco plc, Danish pharmaceutical manufacturer Novo Nordisk, and the US Army Medical Command are among the many recent examples of a broad range of customers who are aggressively deploying Windows 2000 Professional as the standard client operating system within their organizations.
The deployment of mission-critical solutions built using Microsoft(R) server products such as Windows 2000 Server, Windows 2000 Advanced Server and Microsoft SQL Server(TM) 2000 continued to accelerate during the quarter. A wide range of customers, including Chase Manhattan, Nationwide Insurance, Commonwealth Securities and Cinergy are using components of the Microsoft .NET platform to build state-of-the-art enterprise and Internet-based commercial applications.
"Customers building mission-critical applications want a robust, scalable, end-to-end infrastructure solution that delivers business efficiencies and superior performance without breaking the bank. They want to be able to integrate applications and business processes using the Internet, XML and open standards," said Paul Flessner, senior vice president of .NET Enterprise Servers at Microsoft. "The .NET Enterprise Server family of products offers a comprehensive set of solutions to meet those customer needs. With the recent release of BizTalk(TM) Server 2000, and the ongoing success of products like SQL Server 2000 and Exchange 2000 Server, customers are clearly convinced about the benefits of our unique approach."
On Dec. 21, 2000, Microsoft announced an agreement to acquire Great Plains Software Incorporated, a leading supplier of mid-market business applications. This acquisition presents a unique opportunity to deliver integrated, extensible business management applications and services that small and medium companies need to succeed in an increasingly interconnected economy. In addition, it will provide new capabilities to complement bCentral(TM), Microsoft's small business portal. The acquisition is expected to close by the end of the fiscal year.
At 2001 International CES, Microsoft gave audiences a first look at the much anticipated Xbox(TM) video game console. With the support of the industry's top game developers and more than three times the graphics performance of the newest generation of game consoles, Xbox expects to set a new standard in gaming. Also, Microsoft announced the availability of the UltimateTV(R) Service, the first and only service that integrates DIRECTV(TM) programming, dual-tuner digital video recording, live TV controls, interactive television and Internet access in one package.
Business Outlook
Management offers the following guidance for the quarter ending March 31, 2001:
-- Revenue is expected to be in the range of $6.3 billion to $6.4 billion.
-- Diluted earnings per share is expected to be $0.42 or $0.43.
Management reiterates the following guidance for the full fiscal year ending June 30, 2001:
-- Revenue is expected to be in the range of $25.2 billion to $25.4
billion.
-- Diluted earnings per share is expected to be in the range of $1.80 to
$1.82.
This press release contains statements that are forward-looking. These statements are based on current expectations that are based on assumptions that are subject to risks and uncertainties. Actual results will vary because of variations between these assumptions and actual performance in areas such as: general economic conditions; changes in the rate of PC shipments; technological shifts; customer demand; market acceptance of new products and services; competitive products, services and pricing; changes in product and service mix; delay in product ship schedules; product life cycles; currency fluctuations; sale terms and conditions; equity investment volatility; litigation; the impact of FAS 133 regarding the accounting for derivative and hedging activities, and other factors discussed in the company's Form 10-K and other SEC filings. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed after Dec. 31, 2000.
Conference Call Details
Microsoft will hold an audio webcast at 2:30 p.m. PST (5:30) today with John Connors to discuss additional details regarding the company's performance for the quarter and other forward-looking information. The session may be accessed at www.microsoft.com/msft/. The webcast will be available for replay through the close of business on Friday, Jan. 26, 2001.
Founded in 1975, Microsoft is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software -- any time, any place and on any device.
Microsoft, Windows, BizTalk, bCentral, Xbox and UltimateTV are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.
The names of actual companies and products mentioned herein may be the trademarks of their respective owners.
Microsoft Corporation
Income Statements
(In millions, except earnings per share)
Three Months Ended Six Months Ended
Dec. 31 Dec. 31
1999 2000 1999 2000
Revenue $6,112 $6,585 $11,496 $12,385
Operating expenses:
Cost of revenue 756 899 1,468 1,758
Research and development 898 990 1,711 1,946
Sales and marketing 1,013 1,290 1,935 2,328
General and administrative 514 212 662 382
Total operating expenses 3,181 3,391 5,776 6,414
Operating income 2,931 3,194 5,720 5,971
Losses on equity investees and other (10) (28) (29) (80)
Investment income 770 751 1,320 1,878
Income before income taxes 3,691 3,917 7,011 7,769
Provision for income taxes 1,255 1,293 2,384 2,564
Income before accounting change 2,436 2,624 4,627 5,205
Cumulative effect of accounting
change 0 0 0 (375)
Net income $2,436 $2,624 $ 4,627 $ 4,830
Earnings per share:
Basic before accounting change $ 0.47 $ 0.49 $ 0.90 $ 0.98
Diluted before accounting change $ 0.44 $ 0.47 $ 0.84 $ 0.93
Basic $ 0.47 $ 0.49 $ 0.90 $ 0.91
Diluted $ 0.44 $ 0.47 $ 0.84 $ 0.87
Average shares outstanding:
Basic 5,163 5,330 5,146 5,325
Diluted 5,538 5,570 5,533 5,572
Microsoft Corporation
Balance Sheets
(In millions)
June 30, 2000 Dec. 31, 2000
Assets
Current assets:
Cash and equivalents $ 4,846 $ 3,531
Short-term investments 18,952 23,358
Total cash and short-term investments 23,798 26,889
Accounts receivable 3,250 4,143
Deferred income taxes 1,708 1,984
Other 1,552 2,000
Total current assets 30,308 35,016
Property and equipment, net 1,903 2,098
Equity and other investments 17,726 18,281
Other assets 2,213 2,296
Total assets $52,150 $57,691
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,083 $ 1,262
Accrued compensation 557 564
Income taxes 585 656
Unearned revenue 4,816 5,124
Other 2,714 2,019
Total current liabilities 9,755 9,625
Deferred income taxes 1,027 1,644
Stockholders' equity:
Common stock and paid-in capital 23,195 27,178
Retained earnings 18,173 19,244
Total stockholders' equity 41,368 46,422
Total liabilities and stockholders'
equity $52,150 $57,691
Microsoft Corporation
Channel and Business Division Revenue
(In millions)
Three Months Ended Six Months Ended
Dec. 31 Dec. 31
1999 2000 1999 2000
Channels
South Pacific and Americas Region $2,207 $2,369 $ 4,075 $ 4,557
Europe, Middle East, and Africa
Region 1,427 1,430 2,610 2,515
Asia Region 606 737 1,199 1,445
OEM 1,872 2,049 3,612 3,868
Total revenue $6,112 $6,585 $11,496 $12,385
Business Divisions
Desktop Applications $2,531 $2,485 $ 4,744 $ 4,624
Desktop Platforms 1,829 2,063 3,496 3,946
Desktop Software 4,360 4,548 8,240 8,570
Enterprise Software and Services 1,028 1,244 1,977 2,281
Desktop and Enterprise Software
and Services 5,388 5,792 10,217 10,851
Consumer Software, Services, and
Devices 464 506 830 985
Consumer Commerce Investments 30 99 48 196
Other 230 188 401 353
Total revenue $6,112 $6,585 $11,496 $12,385
SOURCE Microsoft Corp.
CONTACT: financial analysts only, Carla Lewis, senior director, Investor
Relations, of Microsoft, 425-936-3703; or, press only, Caroline Boren,
425-637-9097 or carolineb@wagged.com, or Katy Fonner, 503-443-7000 or
kfonner@wagged.com, both of Waggener Edstrom, for Microsoft
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(C) 2001 PR Newswire. All rights reserved.
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