Microsoft Corporation on Tuesday announced record earnings for the quarter ending December 31st, with income of $2.44 billion on revenues of $6.11 billion, a 20 percent increase over the same quarter the year before. These figures include a one-time charge to cover the settlement of a lawsuit by Caldera Inc.; excluding this charge earnings rose 31 percent.

"We are very pleased with this quarter's results, which came in as expected reflecting solid customer demand from around the world, particularly in Asia," said CFO John Connors. "Office 2000 and SQL Server 7.0 continued to perform strongly, but we experienced slowing demand for business PCs during the quarter. With the upcoming launch of Windows 2000 we are extremely excited to usher in a new era in personal and business computing. However, we remain cautious in our expectations for near-term PC demand and corporate software spending, and continue to anticipate moderate revenue growth through the remainder of fiscal 2000."

Windows 2000 will be globally launched on February 17th, though many PC makers will be selling Windows 2000 with their PCs in the next few weeks. The company also recently announced a management shakeup, with Bill Gates dropping the CEO title so he can focus more on software development. Gates and newly appointed CEO Steve Ballmer discussed a new strategy for the company, dubbed Next Generation Windows Services (NGWS), last week. Microsoft has made it clear that the company will focus on software and software services going forward