APPLICATIONS

Microsoft has announced revenue of $15.06 billion for the fiscal quarter ended Sept. 30, 2008, a 9% increase over the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $6.00 billion, $4.37 billion and $0.48, respectively. Microsoft showed particular strength in multiyear annuity sales, which grew more than 20% during the quarter from the combined businesses of Client, Microsoft Business Division and Server and Tools. “Our customers are asking how they can save money and do more with less,” said Kevin Turner, chief operating officer at Microsoft. “Microsoft is uniquely positioned to help our customers save money through supplier consolidation, increased productivity, and a low total cost of ownership through the depth and breadth of our product portfolio and solutions.” Microsoft continued to add to its product and services portfolio with innovative offerings such as Microsoft SQL Server 2008, Microsoft Hyper-V Server 2008 and the first service update to Microsoft Dynamics CRM Online. “In a challenging economic environment, the first-quarter results exhibit the strength and diversity of our business model,” said Chris Liddell, chief financial officer of Microsoft. Business Outlook Microsoft’s business outlook reflects a balance of risks and the likelihood of a continued economic slowdown. The trends seen late in the first-quarter are now forecasted to continue, whereas previous expectations were for the economy to improve in the second half of the fiscal year. In this economic environment, the company is focused on three main actions; working with customers to provide high value products at the lowest total overall cost of ownership, increasing focus on expense management and targeting investment into the highest priority strategic opportunities. Microsoft management offers the following guidance for the quarter ending Dec. 31, 2008:

• Revenue is expected to be in the range of $17.3 billion to $17.8 billion.
• Operating income is expected to be in the range of $6.1 billion to $6.4 billion.
• Diluted earnings per share are expected to be in the range of $0.51 to $0.53.
• Management offers the following guidance for the full fiscal year ending June 30, 2009:
• Revenue is expected to be in the range of $64.9 billion to $66.4 billion.
• Operating income is expected to be in the range of $24.4 billion to $25.5 billion.
• Diluted earnings per share are expected to be in the range of $2.00 to $2.10.

Liddell noted that “we feel extremely good about our relative competitive position and our ability to continue outgrowing IT spend. We believe our exceptionally strong cash flow, product pipeline and financial strength will allow us to weather economic conditions well.”