As both companies on Thursday released their latest financial results, Microsoft sees the economic downturn ending but rival Sun Microsystems' return to growth is still shrouded.
John Connors, chief financial officer at Microsoft, said in a conference call that the company is entering fiscal 2002 with a line-up of groundbreaking new products like Office XP, Windows XP, Xbox and Visual Studio, and .Net.
Connors was upbeat about current performance. "In light of the current economic environment in the US and worldwide, the fact that Microsoft has been able to grow revenue, as well as operating income, is viewed as quite positive. And in this market, I think even any slight good news is well received," Connors said.
In what typically is Microsoft's slowest sales period of the year, the company reported stronger-than-expected revenue.
For the fiscal fourth quarter that ended 30 June, Microsoft posted operating income of $2.75bn, roughly in line with expectations and up just 8 per cent from the $2.55bn posted a year earlier.
Revenue of $6.58bn was up 13 per cent over the year earlier period.
Microsoft announced revenue of $25.30bn for the fiscal year ended 30 June, 2001, a 10 per cent increase over the $22.96bn reported last year.
Operating income totalled $11.72bn compared to $11.01bn in fiscal 2000.
The company predicted that growth would continue. For fiscal 2002, Microsoft projected it would generate revenue of $28.8bn to $29.5bn.
It was a different story at Sun, which reported a loss of $88m in the fourth quarter, compared with net income of $720m a year earlier.
The company said customers continued to cancel or delay purchases of high-power computer workstations and network servers.
Looking ahead, chief financial officer Michael Lehman said, on a conference call, that first quarter sales will be more than $3.7bn, the point at which Sun would break even before acquisition costs.
Lehman said the company has worked to lower its costs and had trimmed expenses 10 per cent in the quarter when compared to the fourth quarter of last year.
"Going forward, we intend to intensify our efforts to streamline our business model and generate even more cash to provide flexibility for our long-term growth," he said.
The company reported that revenue dropped 20 per cent, from $5bn a year ago to $4bn.
For the fiscal year overall, Sun had revenue of $18.25bn, a 16 per cent increase from last year's $15.72nn. But earnings decreased 22 per cent, from $1.86bn to $1.45bn.
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