Microsoft CFO Reaffirms Outlook, Expects XP To Boost PC Sales

Microsoft Chief Financial Officer John Connors on Wednesday reaffirmed the company's financial guidance for the current fiscal year 2002, and said the company still expects a boost from its new Windows XP operating system in the fall.

Connors, speaking to investors at an SG Cowen Technology Conference in Boston, said the company's expectations remain as they were in July when Microsoft announced quarterly earnings and held a regular meeting with financial analysts.

"We haven't provided any more detailed guidance since our analyst meeting on July 26 and our expectations from that day haven't really changed," Connors said.

"We'd anticipated for fiscal year '02 that we would achieve revenue of between $28.8 (billion) and $29.6 billion and that our operating income would be up about 8 percent and that our earnings per share would come in the range of $1.91 to $1.95," he said.

"A key variable in our assumption is that PC shipment demand for the full fiscal year would come in at mid-single digit growth," he added.

Microsoft shares closed up $1.64, or nearly 3 percent, at $57.74 on the Nasdaq on Wednesday.

Connors also said that the first quarter of fiscal 2002 ending September will be as anticipated, or down from the year-earlier quarter.

"We anticipate that the first quarter, as we said in our earnings guidance, would be soft to down. That looks like it's going to be true," Connors said.

Analysts on average expect the company to earn 40 cents a share during the first quarter, down from 46 cents a share in the year-ago period, according to Thomson Financial/First Call.

Microsoft remains committed to the notion that the launch of its new operating system late next month will give a boost to demand for personal computers, he said. Personal computers have had a year of stagnant growth as consumer demand has fallen off and the economy has slowed.

"In the second quarter we anticipate that PC shipments will pick up a bit with the launch of Windows XP on Oct. 25," he said. "And that the second half of the year sees a modest improvement over the previous year."

Copyright 2001 Reuters Limited. All rights reserved.

Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.

Reuters shall be not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.