Microsoft has posted stellar profits and sales for its fiscal first quarter results, and the company said it expects the good times to continue.
The Seattle giant's bullish forecast for the rest of its fiscal year 2000 surprised industry watchers, as only 24 hours earlier Dell warned that its sales would be affected by the soaring prices of memory chips.
Microsoft is traditionally conservative about its future results and chief financial officer, Greg Maffei, was uncharacteristically effusive.
"During the quarter, we also saw excellent PC unit growth, particularly in Asia, and we expect that trend to continue in the December quarter," he said.
He also predicted that the company's second quarter results would be ahead of analysts' estimates.
For the first quarter ending 30 September revenues increased 28 per cent to $5.38 billion, beating analysts' expectations by $200 million.
Net profits, excluding a one-time gain of $156 million on the sale of part of the MSN Sidewalk online guide, jumped 40 per cent to $2.04 billion, and again surpassed analysts' predictions 10 per cent.
It is the fourth consecutive quarter that Microsoft has beaten Wall Street's highest predictions and was even more surprising as the first quarter is traditionally weak.
"It was a solid report and certainly won't do any damage to the stock," said Soundview Financial analyst, Mark Specker. In after-hours trading, Microsoft's stock price rose more than $4 a share to reach $90 3/8.
Maffei's comments were in sharp contrast to his warnings made three months ago when he was more modest about the prospects for fiscal 2000. Then he said the company was faced with the Y2K crisis and he predicted growth would decline to the teens, but yesterday he said: "It does not appear that Y2K had a significant impact on results."
Driving sales were strong corporate demand for Office 2000, Windows NT Server and Backoffice applications.
The company said it still planned to ship Windows 2000 to PC makers this year but would not comment on when the new operating system would be in the hands of users.
Separately, District Judge Thomas Penfield Jackson, who is presiding over the Department of Justice's case against Microsoft, said he will issue his findings on Friday but failed to specify which week.
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