“Almost without it being noticed, Microsoft has transformed
itself from a software company to an investment company. The
Q4 results announced last night show investment income up 132 per
cent compared with the year-ago quarter. Investment income of
$1.127 billion in the quarter represented 32 per cent of
Microsoft’s income before taxes. It was clear from the results that
Microsoft’s investments have been performing more profitably
than its products, with the operating income showing 30
cents/share coming from products and 14 cents from investment
income and interest.”
“Revenue for the quarter was almost flat at $5.804 billion, up
just 0.69 per cent on the year-earlier quarter, compared with the
23 per cent increase seen in Q3. Microsoft’s ability to recognise
revenue more or less as it pleases, may have been helpful here,
allowing it to show this very small increase rather than a
potentially headline-grabbing loss. The FY2000 revenue increased 16
per cent to $22.96 billion, and the profit was $9.42 billion, up 21
per cent.”
“Microsoft’s operating income was down 13 per cent for the
quarter, primarily reflecting a 10 per cent decline in the
sales of MS Office and tools, with Windows sales up 6 per cent, and
consumer group sales up 34 per cent (but with unknown losses,
despite the increase). Microsoft’s productivity (mostly Office)
division now makes 45 per cent of Microsoft’s revenue, Windows 42
per cent, and the consumer stuff 14 per cent.”