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Microsoft Reports Fiscal 1Q Earnings Up 11 Percent: Page 3 of 4

Chief Financial Officer John Connors said Microsoft's quarterly performance was helped by strong personal computer shipments, which grew 10 percent in the quarter rather than 6 to 8 percent as the company had been projecting.

Server shipments also were slightly higher than expected, he said.

For the full 2005 fiscal year, Microsoft said it expects revenue to be between $38.9 billion and $39.2 billion, up slightly from a previous estimate of between $38.4 billion and $38.8 billion. Earnings per share are expected to be between $1.07 and $1.09, also up slightly from an earlier estimate of between $1.05 and $1.08. Both estimates include a stock-based compensation expense.

For the current fiscal second quarter, the company said it expects to have revenues of between $10.3 billion and $10.5 billion, and earnings per share of 28 cents per share, including stock-based compensation expenses.

Shares in Microsoft closed down 14 cents at $28.56 in trading Thursday on the Nasdaq Stock Market, more than $1 off its 52-week high of $29.89. The company reported earnings after the markets closed. In after-hours trading, the shares lost another 56 cents.