Microsoft to take $2.6 billion investment loss

SEATTLE: Microsoft Corp. said on Wednesday that its quarterly revenues would

be up three per cent, higher than expected, but said it would record $2.6

billion in investment losses. But the world's top software maker said results

from operations during its fourth quarter ended June 30 were in line with

expectations.

Microsoft was expected to earn 42 cents a share, according to the consensus

analyst estimate compiled by Wall Street tracking firm Thomson Financial/First

Call. The inclusion of the non-cash investment loss, earnings would be 1 cent

per share.

Microsoft said revenues were stronger than expected and would come in at $6.5

billion to $6.6 billion, up from the company's previous estimate of $6.3 billion

to $6.5 billion. "Core revenue growth for the quarter was strong and

reflects consumer enthusiasm for our products and services, despite a slowing

economy," chief financial officer John Connors said in a statement.

Connors also sounded a bullish note on the future, citing updates to the

company's twin franchise of the Windows operating system and Office package of

business productivity software. "With the recent launch of Office XP and

the upcoming launches of Windows XP and Xbox, we are excited to see another

strong product cycle for the company underway," Connors said.

The $2.6 billion charge largely stemmed from losses in cable and

telecommunications investments, Microsoft said, but gave no details about

specific investments.

(C) Reuters Limited 2001.