Microsoft, which makes the Windows operating system found on most personal computers, said net profits for its fiscal second quarter, which ended Dec. 31, were $2.62 billion, or 47 cents a share, up slightly from the $2.44 billion, or 47 cents a share, a year earlier.
Estimates had been lowered after the Redmond, Wash.-based company warned in December that it expected earnings to be down 5 or 6 percent from earlier expectations.
"Revenue came in a little higher than we had anticipated, so we were pleased with the performance to close the quarter," said Microsoft chief financial officer John Connors.
Microsoft, however, is retaining a cautious outlook on the near future, Connors said. The company reduced third-quarter expectations to 42 or 43 cents per share; analysts had been expecting 44 cents per share.
"The largest uncertainty is just the general state of the United States, and therefore the world economy and what that means for PC demand and technology spending in general," he said.
A steep fall-off in consumer PC buying has hampered industry giants like top chip maker Intel Corp. and PC giant Compaq Computer Corp., forcing them to cut their revenue and profit estimates.
For the six months ended Dec. 31, Microsoft had profits of $4.83 billion or 87 cents per share on revenues of $12.39 billion. In the year-ago period, it earned $4.63 billion or 84 cents per share on revenues of $11.50 billion.
BACK TO TOP
Nortel Meets Expectations, Turns Cautious in Forecast
Nortel Networks met expectations with a 34 percent gain in fourth-quarter revenues, weathering a broad slowdown in spending on network equipment, but turned a shade more cautious in its robust forecasts for 2001.
The world's top supplier of fiber-optic equipment posted a net loss of $1.41 billion, or 46 cents per share, compared with $172 million, or 6 cents a share, in the year-ago quarter.
Excluding $2.23 billion in costs from Nortel's steady acquisition spree and other one-time factors, Nortel's operating profits came to $825 million, or 26 cents a share, for the final three months of 2000.
Revenues totaled $8.82 billion in the just-ended quarter, up from $6.57 billion in the same period in 1999.
The results matched most Wall Street forecasts, according to a survey by First Call/Thomson Financial, allowing a hefty sigh of relief from investors.
However, much like top rival Cisco Systems did last week, Nortel tempered its enthusiasm about the ability of customers to buy expensive equipment for building and upgrading computer networks, Internet backbones and wireless systems.
The Canadian company said it now expects growth in revenues and operating earnings per share of 30 percent in 2001 — hardly anemic, but at the lower end of the 30-to-35 percent forecast Nortel had reiterated as recently as last month.
"The U.S. market is obviously a lot of concern, as to how quickly the stock market will rebound" and whether the Federal Reserve can cushion the economy's slide with lower interest rates, said John Roth, chief executive of Nortel. But, he added, "In tighter markets, some of the weaker guys usually fall away … . Our customers are paying a a lot more attention to making sure to buy from companies that will be around a while."