Microsoft reported strong third quarter earnings today, but warned that Year 2000 issues may affect growth for the rest of the year.
However, the company?s results did not provide any backup for Compaq?s recent statements that the PC industry experienced a slowdown at the start of the year.
Microsoft officials said that the market for its operating system software remained strong, despite the fact that pricing pressures were cutting into the industry?s profits.
The company, which announced net income of $1.92 billion for the quarter ended 31 March, 1999, a 40 per cent increase on the same quarter a year before, said it was ?guarded? about growth for the rest of 1999 as it was likely organisations will lock down their system infrastructures due to Year 2000 concerns.
Revenue for the quarter was $4.33 billion, a 15 per cent increase over the $3.77 billion reported for the same quarter a year ago.
The company said the reported revenue does not include unearned revenue of $400 million related to the Microsoft Office 2000 technology guarantee which will be recognised in coming quarters.
Greg Maffei, Microsoft chief financial officer, commented: ?Microsoft had solid performance across all product lines, but the brightest spots were the continued migration to Windows NT Workstation, strong demand for office despite the impending upgrade, and the strength of our server applications. Results in Asia were also much improved.?
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