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Microsoft Beats Earnings Expectations

The folks in Redmond, Wash., don't even let Wall Street beat them. On Tuesday, Microsoft Corp. announced better-than-expected earnings for the third fiscal quarter ending in March.

With a net income of $1.92 billion and diluted earnings per share of $0.35, the software giant bested predictions by $0.03 per share and showed a 40 percent increase in earnings from the same quarter last year.

"Microsoft had solid performance across all product lines, but the brightest spots were the continued migration to Windows NT Workstation, strong demand for Office despite the impending upgrade, and the strength of our server applications. Results in Asia were also much improved," says Greg Maffei, Microsoft CFO. "However, we remain guarded about growth in 1999, given the likelihood that organizations will lock down their systems infrastructures due to year 2000 concerns."

Paul Maritz, group vice president of the developer group, says SQL Server 7.0 sales got off to a good start and that licenses of SQL Server increased more than 50 percent over the comparable quarter last year.

Revenue totaled $4.33 billion, a 15 percent increase over the $3.77 billion for the same quarter last year. Reported revenue does not include unearned revenue of $400 million related to the Microsoft Office 2000 Technology Guarantee, which will be recognized in coming quarters. Microsoft also realized investment gains of more than $350 million during the quarter. -- Brian Ploskina

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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