Microsoft Holds the Line on 2002 Revenues

Microsoft says that its July revenues prediction for the current fiscal year is still on track and that the release of Windows XP in October will boost the company's financial performance. Microsoft Chief Financial Officer (CFO) John Connors, in Boston this week for a technology conference, reiterated that he expects the company to hit its revenue target of $28.8 billion to $29.6 billion for the fiscal year ending June 30, 2002. The first quarter, which ends in October, will be soft, Connors said, but the second quarter will be a different story.

"In the second quarter we anticipate that PC shipments will pick up a bit with the launch of Windows XP on October 25," he said, "and that the second half of the year [will see] a modest improvement over the previous year." Connors noted that Microsoft's entry into the video-game market with its Xbox device--due in early November--should also have a positive impact. But the Xbox, like XP, speaks to a different audience than Microsoft's traditional core market of businesses. "It's important for us to develop some cachet or coolness," he said, noting that the Xbox in particular is targeted at a much younger market that will evolve into Microsoft's future business customers.

Connors said that the economic slowdown is affecting Microsoft less than other companies because of its diverse portfolio and lack of reliance on the dying dot-com market. And the company's broad geographic footprint lets it weather regional problems more adeptly than some of its competition. Although Microsoft is concerned about the downturn in PC sales, Connors says that the slump won't affect the company's profits or expansion plans.