The company also announced revenue of $6.58 billion for the quarter ended June 30, 2001, a 13 percent increase over the $5.80 billion for the same quarter last year. Operating income was $2.75 billion compared to $2.55 billion for the same quarter last year. Including the non-cash charge related to investment impairments announced on July 11, net income and diluted earnings per share were $66 million and $0.01.

We reported another quarter of strong revenue growth and operating income results. Even in this challenging economic environment, we saw solid customer enthusiasm for our broad array of products and services, which drove positive growth across all our businesses, said John Connors, chief financial officer at Microsoft in a conference call. We are entering fiscal 2002 with a lineup of groundbreaking new products like Office XP, Windows XP, Xbox and Visual Studio .NET. However we continue to carefully monitor changes in the global economic environment in light of the impact they may have on our business.

The Windows family of products had another standout quarter. Windows 2000 Professional experienced particularly strong growth, accounting for 41% of all 32-bit Windows operating systems shipped during the quarter, up from 35% in the March 2001 quarter.

Windows 2000 Professional turned in another incredible performance, and license sales of the Windows family of desktop operating systems exceeded $2 billion for the third consecutive quarter, affirmed Jim Allchin, group vice president at Microsoft in a conference call. With the upcoming launch of Windows XP on October 25, we have a huge opportunity to deliver a new set of breakthrough experiences for home and business users.

Impressive performances by Microsoft SQL Server 2000 and Exchange 2000 Server in the quarter drove record revenue results for Microsoft’s enterprise server and services business. During the quarter, Microsoft also announced the public availability of Mobile Information 2001 Server, which extends enterprise information, and corporate intranet applications and services to mobile users. Furthermore, Office XP, the newest version of the award-winning Office business productivity suite, became widely available on May 31, 2001.