Summary
Microsoft Corporation reported strong revenue growth for the second quarter and first six months of fiscal year 2004, driven by robust PC shipment growth and increased licensing of key products like Office 2003 and Windows Server. Revenue for the quarter reached $10.15 billion, a 19% increase year-over-year, with similar growth seen in the first six months. While revenue showed significant upward momentum, operating income experienced a decline, largely attributable to a substantial $2.21 billion stock-based compensation expense related to the company's employee stock option transfer program implemented in the quarter. Despite this, the company maintained a strong financial position with cash and short-term investments totaling $52.78 billion at the end of the period.
Key Highlights
- 1Revenue increased by 19% to $10.15 billion for the second quarter of fiscal year 2004, compared to the prior year, driven by strong PC shipment growth and increased licensing of Office 2003 and Windows Server.
- 2For the first six months of fiscal year 2004, revenue grew by 13% to $18.37 billion year-over-year.
- 3Operating income for the second quarter declined by 34% to $1.48 billion, primarily due to a significant $2.21 billion stock-based compensation expense related to an employee stock option transfer program.
- 4Consolidated operating income for the first six months also decreased by 12% to $4.62 billion, largely due to the same stock-based compensation expense.
- 5The company's cash and short-term investments grew to $52.78 billion as of December 31, 2003, indicating a strong liquidity position.
- 6Significant legal proceedings and investigations, including antitrust cases in the U.S. and Europe, continue to be a factor, with ongoing settlements and potential financial impacts disclosed.
- 7Microsoft adopted the fair value recognition provisions of SFAS 123 for stock-based compensation, leading to increased expense recognition and restatements of prior periods.