Strong Q4 Sales Tempered by Investment Loss

Factoring out a US$2.62 billion loss on investments, Microsoft turned in strong results for the last quarter of fiscal year 2001, which ended June 30, 2001. The company reported US$6.58 billion in revenues, up 13% from the same quarter last year. Total revenues for FY’01 were a record US$25.3 billion, up 10% from last fiscal year. Microsoft credited strong sales of enterprise platforms and applications for the high revenues and blamed the investment loss—Microsoft’s first—on bad results in the cable and telecom sectors.

In addition, the company gave guidance for its next fiscal year. Although most press commentary has focused on Microsoft’s prediction of low PC sales growth and correspondingly lackluster revenues for its next quarter (Q1’02, which ends Sept. 2001), the company more interestingly predicted a US$1.0 to US$1.4 billion leap in revenues between Q1’02 and Q2’02. This reflects Microsoft’s high hopes for Windows XP and the Xbox game console, both of which will be launched in the second quarter.