Microsoft Posts Strong Earnings

Microsoft Corporation announced
today net income of $1.13 billion, and earnings of $0.85 per share for the
quarter ended December 31, 1997.

This marks a 49% increase over the $0.57 earnings per share for the same
quarter last year, according to the company. Microsoft also reports that
revenues totaled $3.59 billion, a 34% increase over the $2.68 billion
during the corresponding quarter last year.

In a statement released today, the company said the strength of European
and OEM channels worked to offset recent Asian market weakness.

“European revenues were up 33% over the same quarter last year and OEM
revenues expanded 40%,” said Greg Maffei, chief financial officer. “But the
news isn’t all good, as revenues from Southeast Asia and the Far East
declined 8% from the prior quarter. Economic weakness in these geographies
clouds the outlook for calendar 1998.”

Microsoft Office 97 also helped to buoy revenues with a third consecutive
quarter of increased shipments, and the Windows 95 operating system was
“seasonally strong,” according to Microsoft.

During the fourth quarter, the software giant also announced significant
alliances with Unisys, Silicon Graphics, and Tele-Communications Inc. (TCI).

Subsequent to the quarter’s end, Tele-Communications Inc. (TCI) announced
that it had signed an agreement to license a version of the Microsoft Windows
CE operating system for a minimum of five million digital set-top boxes.