Microsoft Corporation yesterday reported a 25 per cent increase in fourth-quarter net earnings and said sales of its Windows 98 operating system had topped one million since its June 25th release. The group, which employs around 1,200 people at its European headquarters in Ireland said net earnings in its fourth quarter, which ended June 30th, came to $1.36 billion (£971 million) or 50 cents a share, beating market expectations by two cents and up from 40 cents a share in the same period of 1997.

Revenue in the fourth quarter surged 26 per cent over the year-earlier period, according to the company, to $4 billion.

For the 12 months to June 30th, revenue increased 28 per cent over the previous fiscal year to $14.48 billion. Net income for the year was $4.49 billion including a previously announced $296 million write-off of acquired technology related to the purchase of WebTV.