Microsoft yesterday reported a profit of $2.2 billion for its fiscal quarter ended June 30th, up 62 per cent from $1.357 billion in the same period a year earlier.

Earnings per share amounted to 40 cents, up from 25 cents a year earlier and ahead of Wall Street estimates of 36 cents per share.

Revenue for the fourth fiscal quarter was $5.76 billion, a 39 per cent increase over the comparable quarter in the fiscal year 1998.

The software giant reports its full fiscal year ended with a profit of $7.79 billion on revenues of $19.75 billion.

"Continuing consumer demand for Microsoft Windows and Office drove another year of fine financial performance," said Mr Greg Maffei, chief financial officer.

However, the software group predicted that its growth rates in the upcoming fiscal year will slow "due to slowing PC demand, uncertainty surrounding Y2K, and uncertain global economic conditions". Mr Maffei said these trends meant "we will not see further (profit) margin expansion".