Microsoft Corp beat Wall Street expectations again, posting third-quarter earnings of $1.34bn, or $0.50 per share, when analysts surveyed by First Call were looking for $0.48. That’s a bottom line and EPS increase of 28.3% and 25%, respectively, over the year-ago quarter. Revenue rose 17.6% year-over-year to $3.77bn. The company says business fundamentals continued to be strong across most geographies during the quarter, especially North America. Office 97 continued its solid sales performance, surpassing the 30 million mark. NT Workstation sales rose 14% in the quarter, up from 13% in the second, while NT Server licenses saw 40% growth year-over-year. Office 98 Macintosh Edition, introduced during the quarter, contributed two strong months to overall revenues. But the talk of the day – from always cautious chief financial officer Greg Maffei – was that Redmond’s momentum is slowing. Revenue growth has been shrinking in each of the last five quarters, from 45% to below 18% now. Maffei warns that growth may be even slower for the remainder of the year. He points the finger of blame at a host of factors, including the sub-$1000 PC boom, slower overall PC sales growth, a mature product mix, the Asian financial crisis and year 2000 concerns. For the fourth quarter, we can expect revenue flat sequentially, with earnings down a few pennies from this quarter’s half dollar. Expenses will increase with the launch of Windows 98 as the marketing machine stuffs the channel with it. Maffei also cites the growing operating costs of the WebTV unit (which now claims 300,000 subscribers) as a detriment to next quarter. Next year’s first quarter should also see essentially flat revenue while the second quarter should mark a slight increase, although the bottom line for each quarter should closely resemble the fourth quarter. For the nine-month period, net income rose 29.9% to $3.11bn on revenue up 28.2% at $10.49bn. Earnings per share rose 27.2% to $1.17 for the nine months. Nine-month results include an acquisition charge of $296m.
รก
