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January 20, 1997updated 05 Sep 2016 1:04pm

MICROSOFT SENDS OUT A SHIVER WITH 1998 CAUTION

By CBR Staff Writer

Microsoft Corp beat one cent even what the whispered expectation for its second quarter was, reporting second quarter net profits of $741m up 28% on $575m, on revenue of $2.68bn up 22% on the $2.2bn it did in the same period last year. While earnings per share were $0.57, up 27% from a year ago – the whisper was for between $0.53 and $0.55 – CFO Mike Brown sent a warning to the markets that he expects the company’s runaway growth to be pegged back during its fiscal 1998 beginning in July due to lower revenue increases in our maturing businesses and margin pressure from continuing aggressive spending on R&D and new business ventures. By that it means the vast investment it has already made to reinvent itself and its products for the internet and what it’ll have to spend to pass and then stay ahead of the pack on the net and in the client/server world. Operating margin was $1.081bn, up 37% on $786m. Geographically North America contributed $759m to the second quarter, up 20%; international business was up 31% at $424m; Europe, thorn in the flesh for so many companies recently, lagged at $631m, up only 10%. OEM revenue was up 28% at $866m. By products, platforms accounted for $1.487bn, up 31%; applications and content $1.193bn, up 11%. At the half way revenue stands at $4.975bn, up 18% on $4.211bn last time, profit is up 26% at $1.355bn from $1.074bn.

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