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Thursday, July 16, 1998 Published at 21:16 GMT 22:16 UK

Business: The Company File

Windows 98 boosts Microsoft profits

Strong sales of the new Windows 98 boosted profts

US computer software giant Microsoft has reported a 28% increase in earnings in the latest quarter, beating analysts' expectations.

The company said the figures were boosted by strong early sales of Windows 98.

Microsoft earned $1.36bn, or 50 cents per diluted share in its fourth quarter, compared with $1.06bn or 40 cents per share a year earlier.

Analysts had predicted earnings of around 48 cents per share.

The company's chief financial advisor, Greg Maffei, said it had been "a great year for all of our major products" which was "capped by strong initial results from Microsoft Windows 98."

Vice president Brad Chase said more than one million retail licenses of Windows 98 upgrades had already been sold in North America since the launch of the product on June 25.

"Even more encouraging is the strong customer satisfaction ... as measured by an independent market research firm," he said.

Japan 'just horrible'

It has not been all good news, though. Fourth-quarter finished goods revenues in Japan decreased 26% from a year ago to the lowest level in a year and a half.

Carla Lewis, senior director of investor relations, said: "Japan has just been horrible. It's almost in the category of no hope in sight."

The company also said that the next version of Windows NT had been slow in arriving and was not expected to contribute to earnings until the year 2000.

Microsoft said ti planned to continue its stock repurchase programme in the year ahead.

The programme provides shares for the company's employee stock option and stock purchase plans. In the last financial year, Microsoft bought back some 38.8m shares.

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