Friday, July 23, 2004 - Microsoft Posts 81% Profit Increase - Microsoft Posts 81% Profit Increase "Chief Financial Officer John Connors said that growth by each of Microsoft's seven business units helped lift the company while many software companies suffered. In particular, Mr. Connors pointed to Microsoft's Office System software as a strong performer. Sales of software for large server computers hit a record, while the MSN online service posted its first full-year profit. "We've got a really great end to the year and an extraordinarily good pipeline for the future, so we are very jazzed here in Redmond," Mr. Connors said.
For the quarter ended June 30, Microsoft said net income rose to $2.69 billion, or 25 cents a share, from $1.48 billion, or 14 cents a share, a year earlier.
Microsoft's results showed the underlying strength of its operations and added weight to recent signs that the biggest software makers are growing stronger as their industry matures and as business buyers try to consolidate their spending with fewer suppliers. Yesterday, Germany's SAP AG, the world's third-largest software maker behind Microsoft and Oracle Corp., posted a 14% jump in its net profit on the strength of U.S. sales. (See related article.)
Those results buck surprise profit warnings earlier this month from a host of other software makers, including PeopleSoft Inc. and Veritas Software Corp., who said customers were delaying purchases.
For the quarter just ended, Microsoft said better-than-expected PC sales helped lift sales of its Windows group by 9% to $2.73 billion and spurred a 10% rise to $2.06 billion in the unit's operating income.
The quarter seemed to show that businesses are upgrading to Microsoft's Office System software, which helped drive a 23% increase in sales, to $2.88 billion, in the Information Worker group. Operating profit at the group reached $1.96 billion, a 33% increase over the year-earlier period.
Revenue from server software surged 20% to $2.3 billion on the strength of Windows Server 2003 operating system. The company closed out the year ended June 30 with revenue of $36.84 billion, a 14% rise from $32.19 billion in the previous year."
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