Microsoft Announces Fiscal Third Quarter Results

HostReview.com
Friday, April 29, 2005; 09:33 AM

Microsoft Corp. today announced revenue of $9.62 billion for the quarter ended March 31, 2005, a 5% increase over the results in the same period of the prior year.

Operating income for the third quarter was $3.33 billion, compared to $1.28 billion in the prior year. Operating income for the third quarter includes $768 million related to legal charges, compared to $2.53 billion in legal charges in the prior year.
Net income and diluted earnings per share for the third quarter were $2.56 billion and $0.23 per share, which included $0.05 of legal charges. For the previous year, net income and earnings per share for the third quarter were $1.32 billion and $0.12 per share, which included $0.17 of legal charges. Operating income, net income, and earnings per share amounts include stock based compensation expense.

"Despite a mixed enterprise software environment, the quarter played out largely as we expected and operating income and earnings per share results were in line with our expectations," said Scott Di Valerio, corporate vice president and corporate controller at Microsoft.

Revenue and operating income growth for the quarter were driven by a healthy Server and Tools business. Third quarter revenue growth for the segment of 12% over the prior year resulted from double-digit growth in the SQL Server™ and Exchange Server product lines.

During the quarter, Microsoft announced significant new real-time communication and collaboration capabilities for the Microsoft Office System of products, servers, and services.

Mobile and Embedded Devices revenue grew 31% over the prior year as Windows Mobile™ products experienced strong demand. Windows Mobile license sales for connected devices were more than double prior year levels while the Windows Mobile software platform continues to experience strong momentum with developers.

Microsoft will hold an audio webcast at 2:30 p.m. PT (5:30 p.m. ET) today with Scott Di Valerio, corporate vice president and corporate controller, and Curt Anderson, general manager of Investor Relations, to discuss details regarding the company's performance for the quarter and other forward-looking information.