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Thursday, 19 October, 2000, 05:40 GMT 06:40 UK
Tech giants beat expectations
Steve Ballmer and Bill Gates
Microsoft chief executive Steve Ballmer and chairman Bill Gates
The US software giant Microsoft has shrugged off its legal concerns to post better than expected quarterly profits.

Microsoft said it had done well across all its businesses, with key product Windows 2000 performing strongly in the corporate market.

Profits in the three months to 30 September had risen to $2.58bn, from $2.19bn a year earlier.

Sun Microsystems, the biggest maker of computers that serve up web pages, also reported a big boost in quarterly earnings.

Internet service provider America Online joined in the fun, posting record subscriber and advertising revenue growth.

Relief for markets

The figures will come as a welcome relief to the markets, which have been taking a technology-led battering.

US stocks initially spiralled to year lows on Wednesday, with the Dow Jones industrial average crashing below the psychologically important 10,000 barrier, before staging a partial recovery to end down 1.14%, at 9975.02.

The fall was led by an 18-point drop in the shares of IBM.

Microsoft, the world's largest software company, announced its profits jump after the markets closed.

After-hours trading

Microsoft's stock has been battered recently by concerns over a slowing PC market and lacklustre sales while it waits for key new products to gain momentum.

But investors sent Microsoft shares up $2, or 4%, to $53.75 in after-hours trading.

The software giant's share price has fallen by more than 50% since last December.

One weaker spot for the firm was its operations in Europe, where a weakening euro had hit demand for PCs, and profits.

The firm said demand in Europe was likely to remain sluggish because most machines were built by US firms and priced in US dollars, making them about 25% more expensive to European consumers than a year ago.

Sun Microsystems

Sun Microsystems said first-quarter earnings rose 88%, with sales soaring 60%.

The earnings release was briefly and mistakenly posted on Sun's internet site and then quickly pulled down.

The figures were meant to be distributed after the markets closed.

Before word spread to traders and investors, Sun shares had been trading at about $108.

But once it did, the shares shot up $10.

In Sun's fourth quarter, its sales rose 42%. Its sales vastly outpaced those of rivals IBM and Hewlett-Packard.

AOL delivered profits of 14 cents a share, slightly ahead of expectations, thanks to strong growth in subscriber, e-commerce and advertising revenues.

AOL said its first-quarter earnings, excluding extraordinary items, rose to $340m, compared to $182m.

Advertising and e-commerce revenue - which accounted for a third of total revenues - rose 80% to $649m, within estimates.

The company, which is in the midst of seeking merger approval from Time Warner, said it added 1.4 million new subscribers in the quarter, to give it a worldwide total of 24.6 million members worldwide.

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13 Oct 00 | Business
Tech stocks roar back
17 Oct 00 | Business
Microsoft, Intel hit Nasdaq
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