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Microsoft Rides XP Sales

7/19/2002 02:26:00 PM Eastern

Redmond, Wash. - Microsoft recorded a 9 percent revenue increase in its desktop software segment, hitting $5 billion in its fiscal fourth quarter, up from $4.6 billion in the year-ago period.

For the full fiscal year, ended June 30, the desktop software division enjoyed a 7 percent rise in revenue, to $18.9 billion, up from $17.6 billion the previous year.

Breaking out its consumer software, services and devices revenue - which includes the Xbox video game system, among others - Microsoft revenue in the fourth quarter hit $822 million, up from $509 million in the fourth quarter of last year.

The company said sales of its Xbox video game consoles hit 3.9 million for the fiscal year, down from its original expectations, but on the high end of company estimates announced three months earlier.

Overall Microsoft revenue increased 10 percent in the fourth quarter, driven by demand for the company's Windows XP operating system and software for businesses, reaching $7.3 billion, up from $6.6 billion year over year.

Net income hit $1.5 billion, including an after-tax charge of $806 million. In the same period the previous year, net income was $65 million, including a charge of $3.9 billion for investment write-downs.

For the fiscal year, Microsoft revenue climbed 12 percent, to $28.4 billion, up from $25.3 billion in the previous year.

Net income for the 12 months was up 6.5 percent, to $7.8 billion, compared with $7.4 billion the previous year.

Looking ahead, revenue is expected to be in the range of $7 billion to $7.1 billion in the current fiscal quarter ending Sept. 30. Operating income is expected to be in the range of $2.9 billion to $3 billion.

For the next full fiscal year, Microsoft expects revenue to be in the range of $31.4 billion to $32 billion, slightly below initial forecasts, but still 11 to 13 percent above this year's total. Operating income is predicted at $13.3 billion to $13.6 billion.