Microsoft confirms profit pledge

Microsoft has reiterated it expects to achieve its financial targets for the current accounting year, which runs to June 2002.

The software giant's chief financial officer John Connors told an investors' conference the firm expects 8% growth in operating income.

On Wall Street, the Nasdaq gave a weak response to the earnings reiteration and eventually closed Wednesday's session down 0.66%, or 11.77 points, at 1759.01.

The Dow Jones Industrial Average spiked on the news, having already gained a filip as several other big brand US companies said they were comfortable with their earnings targets.

The Dow Jones broke through the 10,000 barrier for the first time since 31 August to close up 0.36%, or 35.78 points, at 10,033.77.

To soon to say?

Mr Connors said, "We'd anticipated for fiscal year 02 that we would achieve revenue of between $28.8bn and $29bn and that our operating income would be up about 8%."

He added that earnings per share would be between $1.91 and $1.95, in line with targets set out in mid-July when Microsoft issued 2001 results, the Reuters news agency reported.

Microsoft's financial year has only just begun - one likely reason for the muted market response.

Another could be the "key variable" highlighted by Microsoft's chief financial officer.

PC sales critical

The software firm is working on the assumption "that PC shipment demand for the full fiscal year would come in at mid-single digit growth", Mr Connors said.

Analysts are increasingly pessimistic about PC sales as big corporate buyers scale back orders to adapt to economic slowdown.

Research firm IDC has forecast worldwide IT spending could plunge by $150bn over the next two years

US investors are keenly awaiting a trading statement from US chip-maker Intel on Thursday for an an indication of the health of the PC market.

Good news grows

Microsoft was not the only major US firm to say on Wednesday it expects to make its profits targets.

The list of big brand companies issuing reassurances included household products firms Proctor & Gamble and Colgate Palmolive and brewer Anheuser Busch.

Proctor & Gamble said it remains comfortable with its guidance for the three months from July to September 2001 and for all of fiscal 2002.

Colgate Palmolive chairman and chief executive Reuben Mark said the company still expects to meet third-quarter and full-year earnings estimates - including double-digit growth in earnings per share in 2002.