Microsoft Announces Strong Quarterly Revenue and Income

REDMOND, Wash., April 19, 2001 — Microsoft Corp. today announced revenue of $6.46 billion for the quarter ended March 31, 2001, a 14 percent increase over the $5.66 billion for the same quarter last year. Net income and diluted earnings per share were $2.45 billion and $0.44.

“Results were strong across all businesses and came in a little better than we expected. We were particularly pleased by the ongoing strong performance of Windows 2000 Professional and the accelerating demand for our .NET Enterprise Server products by business customers,” said John Connors, chief financial officer at Microsoft. “Despite this quarter’s solid performance, we continue to be mindful of the current economic climate and the impact it may have on business and consumer demand.”

“We’re seeing that more business customers of all sizes recognize the unique value proposition of Microsoft’s products, and our results reflect an excellent performance by our sales, marketing and service teams, and partners worldwide in communicating this value proposition to customers,” said Orlando Ayala, group vice president for worldwide sales and marketing at Microsoft. “With the availability this past quarter of BizTalk Server 2000, Application Center 2000 and Internet Security and Acceleration Server 2000, Microsoft has delivered three more best-in-class offerings making up the .NET Enterprise Server family — a powerful, highly integrated platform solution that is designed to deliver world-record performance, scalability, reliability and flexibility at a price that doesn’t break the bank.”

The Windows 2000 family of products posted another record quarter. Windows 2000 Professional showed particularly strong momentum, accounting for 35 percent of all 32-bit operating systems that shipped during the quarter, up from 31 percent in the December 2000 quarter. Also during the quarter, Microsoft unveiled Windows XP, the next version of the Windows family of business and consumer operating systems. Built on the enhanced Windows 2000 engine, Windows XP features a new user interface and extends the personal computing experience by uniting PCs, devices and services in new and exciting ways. Windows XP is expected to be available in the second half of calendar 2001.

Office XP, the newest version of the award-winning Office business productivity suite, was released to manufacturing during the quarter and will be broadly available on May 31, 2001. Office XP provides a smarter work experience for individuals, teams and organizations by enhancing end-user productivity, providing rich collaboration services, and enabling an array of secure, reliable and flexible business solutions.

On March 19, 2001, Microsoft unveiled “HailStorm,” a set of user-centric, XML-based Web services that will enable the different technologies in an individual’s life to work together, and cater to the user’s preferences. Solutions based on “HailStorm” technology are designed to allow users to manage and securely share their personal information across a variety of devices and applications, regardless of the underlying operating system, programming language or online service. “HailStorm” is a key milestone in the ongoing delivery of .NET, Microsoft’s initiative to empower people through great software, any time, any place and on any device.

On April 5, 2001, Microsoft completed its acquisition of Great Plains Software Inc., a leading supplier of mid-market business applications. Microsoft Great Plains will continue to develop, market, distribute and support its award-winning business applications, such as Dynamics, eEnterprise and Solomon, under the Microsoft Great Plains Business Solutions brand.

Business Outlook

Management offers the following guidance for the quarter ending June 30, 2001:

  • Revenue is expected to be in the range of $6.30 billion and $6.50 billion.

  • Diluted earnings per share is expected to be $0.41 or $0.42, after including a charge of one cent related to the acquisition of Great Plains Software, Inc.

Management offers the following guidance for the full fiscal year ending June 30, 2002:

  • Revenue is expected to be in the range of $28 billion and $29 billion.

  • Diluted earnings per share is expected to be in the range of $1.90 to $1.94.

These statements are based on current expectations that are based on assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as: general economic conditions; changes in the rate of PC shipments; technological shifts; customer demand; market acceptance of new products and services; competitive products, services and pricing; changes in product and service mix; delay in product ship schedules; product life cycles; currency fluctuations; sale terms and conditions; financial market volatility affecting the value of our investments that may result in a reduction in carrying value and recognition of losses; litigation; and other factors discussed in the Company’s 2000 Form 10-K and other reports and filings with the Securities and Exchange Commission.

Webcast Details

Microsoft will hold an audio webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today with John Connors to discuss additional details regarding the company’s performance for the quarter and other forward-looking information. The session may be accessed at . The webcast will be available for replay through the close of business on Friday, April 27.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.


Microsoft, Windows and BizTalk, are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information, financial analysts only:

Carla Lewis, senior director, Investor Relations (425) 936-3703

For more information, press only:

Caroline Boren, Waggener Edstrom, (425) 638-7000, [email protected]
Katy Fonner, Waggener Edstrom, (503) 443-7000, [email protected]

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages. Shareholder and financial information as well as today’s 2:30 p.m. PDT conference call with investors and analysts is available at .

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