Growth Revives in First Quarter

Microsoft’s business resumed growth in the first quarter of fiscal 2001 (ending Sept. 30, 2000), with an 8% increase in revenue over the comparable quarter of fiscal 2000. Excluding the effects of an accounting change, net income rose approximately 18%. Microsoft’s Chief Financial Officer John Connors attributed the better-than-expected result to sales of Windows 2000 Professional and the arrival of Windows Me. Connors expects year-to-year revenue and income growth in the “high single digits” next quarter, thanks to the holiday season and the absence of the Year 2000 concerns that slowed sales the previous year.

Revenues

Microsoft’s revenues for the fourth quarter of fiscal 2000 (Q4 FY’00) were US$5.80 billion, essentially unchanged from the prior calendar quarter. Strong results in the U.S. and the recovering Asian economies helped, while European revenues continued to suffer from both general economic problems and the fall of the Euro. (European revenues would have been flat if the Euro was still at Q1 FY’00 levels.) OEM results were affected by the increasing market share of large multinational manufacturers (e.g. Compaq), who pay lower rates for their software licenses.