Microsoft Earnings Jump 29% But Company Officials Warn Profits Should Slow By July

Microsoft Corp. had profits of $741 million for the quarter that ended Dec. 31, up 29 percent from the same period a year earlier, the software company said Friday.

The results, which amounted to 57 cents per share, were well above the consensus of analysts surveyed by First Call, who had predicted earnings of 51 cents a share.

A year ago, net income was $575 million, or 45 cents a share, adjusted for a December 2-for-1 stock split. Revenues for the most recent quarter, the second in the company’s fiscal year, were $2.68 billion, up 22 percent from the $2.2 billion a year ago.

“The company performed solidly in all of our businesses, including operating systems, desktop applications, enterprise software, tools, hardware and content,” said Mike Brown, chief financial officer.

As has become the company’s practice, officials downplayed expectations for continued profit strength. Brown warned that earnings growth should slow in the year starting July 1 as Microsoft’s businesses mature, and the company spends more on research and development and new ventures.

Bob Herbold, chief operating officer, said Microsoft is making major investments, including putting increased Internet capabilities into its products.

One gauge of Microsoft’s growth will be sales of Office 97, an upgraded suite of popular software released earlier in the week. About 500,000 copies of Office 97, which includes Word, Access and Excel software, have been ordered in advance by retailers, and about 3 million have been ordered for corporate use. The edition will retail for $500.

For the first six months of its fiscal year, Microsoft had net income of $1.36 billion, or $1.04 per share, on revenues of $4.98 billion. That compares with net income of $1.07 billion, or 84 cents a share, on revenues of $4.21 billion a year earlier.