Microsoft's earnings surge 41 percent in fourth quarter Strong showing exceeds Wall Street expectations

REDMOND, WASH. — REDMOND, Wash. -- Microsoft Corp.'s fourth-quarter earnings rose 41 percent, more than most analysts expected, on strong sales of its business computer programs and Windows NT and Windows 95 operating systems.

The solid showing may ease concerns about earnings from computer and software companies amid disappointing forecasts from Digital Equipment Corp. and Hewlett-Packard Co., analysts said.


"They did better than I was expecting," said Jamie Kiggen, an analyst at Bear Stearns & Co. in New York. "Microsoft is such a visible company that strong earnings will have a calming effect."

Microsoft's net income rose to $559 million, or 87 cents a share, after profit from operations was $397 million, or 63 cents, a year ago. In the year-earlier fourth quarter, Microsoft paid an acquisition cancellation fee to Intuit Inc. and took a 5 cents-a-share charge. That made net income $368 million, or 58 cents.


Wall Street expected earnings of 84 cents a share, based on the average estimate of 21 analysts surveyed by Zacks Investment Research.

Revenue in the quarter ended June 30 rose 40 percent to $2.26 billion from $1.62 billion.

Strong sales of Microsoft's Windows 95 operating system boosted results, Microsoft said. Sales of Windows NT almost doubled in the quarter.

Pub Date: 7/23/96