Microsoft said Thursday it will have to defer about US$400 million in revenue from the current quarter to future quarters because of a delay in the release of Office 2000.
The accounting move could result in an earnings shortfall of 8 cents a share in the current fiscal third quarter ending 31 March, but the world's biggest software company would be able to bump up earnings by the same amount in the fiscal fourth quarter ending June.
"This is just an accounting mechanic and a timing mechanism," Microsoft finance chief Greg Maffei said in an analyst conference call.
Microsoft (MSFT) was supposed to ship Office 2000, the new version of its word processor and spreadsheet package, this quarter. Microsoft will take the revenue deferral because it issued coupons to Office 97 users who can redeem them for free upgrades when Office 2000 becomes available.
Maffei said the shortfall will be made up by other income from Microsoft's investments. Otherwise, he said Microsoft was still financially on track.
"The business is fine and PC demand is definitely there," he said.
Analysts also said the moves don't affect Microsoft's operation. "It's a non-event," said Chris Galvin, analyst at Hambrecht & Quist. "It's a movement of revenue from one quarter to another."
Maffei said the final version of Office 2000 is in testing.
This version of Office will have more Web-friendly features. Also, all international versions have been combined into one multilingual package. Word's spellchecker, for example, can fix spellings of documents in French or Spanish.
