Posted on 10/26/2007 7:23:43 PM PDT by jdm
Microsoft Relevant Products/Services posted revenue of $13.76 billion for the company's fiscal first quarter -- a 27 percent increase over the year-earlier period. Net income amounted to $4.29 billion or 45 cents per share.
"The first quarter represented an outstanding start of the fiscal year, with every part of the company performing above expectations," said Microsoft CFO Chris Liddell. "I was particularly happy that we increased revenue while meeting operating expense guidance."
Microsoft's Client, Business Division, and Server and Tools units grew combined revenue in excess of 20 percent, with demand for Vista, Office 2007, Windows Server, and SQL Relevant Products/Services Server all leading the way. "The performance was across all divisions, customer segments, channels and geographies," Liddell noted.
Higher Octane Vista Mix
The company's Business Division saw revenue climb by 20 percent to reach $4.11 billion, even as revenue at the company's Server and Tools unit rose by 16 percent to $2.5 billion. Microsoft also saw sales soar in its Entertainment and Devices division, driven by the uptake of 1.8 million Xbox 360 consoles as well as by soaring demand for the new Halo 3 video game. The $1.93 billion in revenue racked up by the division represented a 91 percent increase over the prior-year period.
But Microsoft executives were clearly the most pleased with the performance of the company's Client unit, which has shipped 88 million copies of Vista to date -- almost double the number of XP copies that had shipped in the equivalent period of XP's product cycle.
"Customer demand for Windows Vista this quarter continued to build with double-digit growth in multiyear agreements by businesses and with the vast majority of consumers purchasing premium editions," said Kevin Johnson, the president of the company's Platform and Services Division. "Since we launched Vista, the revenue growth has been in excess of 20 percent for three quarters in a row," Liddell added.
Liddell also noted that the sales ratio of high-end versus low-end editions of both Vista and XP -- which Microsoft calls the "premium mix" -- stood at 75 percent in the quarter compared with 59 percent in the year-earlier period.
Business Growth Ahead
The volume portion of Microsoft's sale of its client annuity agreement, which includes an upgrade path to Vista for enterprise, rose by 27 percent. Liddell said this is probably the best indicator Microsoft has for gauging the intention of businesses to adopt Vista.
"Certainly some businesses will be waiting for Vista SP1 to roll out, but in terms of multiyear agreements, their intention to roll out is signaled by that," he added. "We still think that the consumer side will grow faster than business, but overall it was a very good story on the client side."
Liddell also said that Microsoft had enjoyed 20 percent growth in the so-called BRIC countries of Brasil, Russia, India, and China. "I think that the benefit we saw on the business aspect was most particular in some of the emerging markets, and that helped us with the legalization and piracy aspect of our growth," Liddell said. "Enlarging our geographic presence has positioned us to benefit from the continued worldwide economic expansion."
ping.
Not that great, either. Notice their wording:
“But Microsoft executives were clearly the most pleased with the performance of the company’s Client unit, which has shipped 88 million copies of Vista to date — almost double the number of XP copies that had shipped in the equivalent period of XP’s product cycle.”
Shipped. Not sold, shipped. The numbers on the internet aren’t adding up if they’d *sold* that many, so they’re claiming “shipped” now.
Just think how much better it would have been if the had a decent product.
Rumors of Microsoft’s death have been greatly exaggerated!
Three cheers for American, commercial software!
I’m using Vista, it’s working fine after I disabled the default double secret probation security checking.
I have to say that it’s a nice incremental improvement over XP.
Nice job Microsoft, again.
Rightly or wrongly, the market disagrees. They added a whopping $15 billion to their market cap today.
Man, if I only had the foresight to buy Microsoft stock in the 80s....
“Microsoft Revenue Tops $13 Billion in First Quarter”
Yeah but what was Apple’s?
Tech is firing on all cyliders at the moment. As are commodities. It is still 1/4th the value with the PE ratio it was in 2000 so we may still have some upside to go. In this market though, the ones beating/crushing earnings are tech so they may still be fairly/undervalued overall. I highly recommend shorting Chinese stock at this point though!
#2 Apple had revenue of 6.22 billion (less than half MSFT) on profit of 904 million (25% of MSFT)
Considering this is the first release in almost five years and it is the best they could do it is really disappointing. I have the Ultimate version on my HP and I cannot say it was anywhere worth the investment. I am considering going back to XP.
Microsoft has lost its way and I am afraid it is destined to further decline. Yes, Microsoft had a good quarter as almost all new PC’s are shipped with Vista but most corporations are replacing Vista with XP on the machines they receive.
Unless they rewrite the operating system, as they promised this time but did not deliver, I cannot see them maintaining their lead for long. Too bad.
Wish I could use an Apple at the office but the IT staff will not support them. Guess it is job security.
Eventually MSFT will be like a very profitable version of SAP, except they will have both a niche enterprise market plus a consumer electronics division.
No doubt!
I see these results as proof that there are a lot of people (and businesses) out there willing to pay good money for inferior products.
Apple's Reality Distortion Field™ is nothing compared to Microsoft's Mind Control Ray™
Geesh it looks like a yearbook photo from some geek commune.
Hahah Wouldn't ya love to travel back in time and have that picture to show around and say, These people are going to change the world and make Gutenberg look like a piker.
You would be locked into a rubber room before you could say "Billionaire Bill Gates"
You suffer from the 6th deadly sin: Jealosy.
No, you misunderstand me. I like Windows and I marvel at what Gates and Crew have accomplished (I grew up in a world without home computers and the internet).
I am just in awe of how geeky they all looked even by late 70s early 80s styles/standards.
I mean honestly if you hand walked around with that picture and told people this bunch was going to be a major force in changing the way the world communicates and they would become some of the richest people in the world, 99 out of 100 people you told would have laughed in your face.
Doesn’t this have more to do with MS’s crackdown on illegal copies of Windows, where users are forced to buy a legal version, or things like their printers quit working, and they get these nasty messages whenever accessing the internet???
Correction. I should have said ‘something’ to do with, instead of ‘more’ to do with.
Microsoft is doing just fine. Longhorn is in the pipe. Visual Studio 2008 is coming along nicely. Their workflow engine is very well done. .NET 3.0 is extremely strong. They have some of best people on the planet working to exploit multicore and network processing.
I love Macs, but they just don't have the commercial properties of Microsoft.
Went to Best Buy yesterday and poked around with the desktops for an hour. I discovered that Vista makes some sense with 3gb ram, above average video card and a good dual core processor. I like the Aero effects and the overall look of Vista
I am slowly buying the parts I need to make (as in screwdriver) a Vista computer
That would be your best bet with Vista, just make sure there are Vista compatible drivers for the parts you choose. Early this year I built a dual core system with a few gigs of RAM and tried Vista on it. Vista ran great and was surprisingly stable, but I just didn't like it because it was a hassle to use. The UAC "security feature" was just intolerable for me. I know it can be disabled, but I understand that the OS heavily relies on it for security. I also didn't like 'cartoony' look of the UI, of course I dislike a GUI anyway.
I run XP so it looks like Windows98. Cartoony aspects of XP get turned off. But I like the Aero look from what I see so far. Really XP is good enough for me. I will build a Vista-Aero computer for the fun of it plus so I can help people who have Vista questions and problems
E2140 is what I’ll get and overclock it. I have bought everything but processor and motherboard for my Vista machine. And if I don’t like Vista I’ll slap XP on it
That's what I ended up doing. I lasted four days on Vista before upgrading back to XP. lol I was going to put Linux on my new machine but there wasn't yet(and still aren't) any Linux drivers for it.
I frequently see language in software that talks about shipped not sold, especially when a company uses indirect sales, they make money on a lot of products they didn’t technically “sell” but they did ship it. Especially in this SOX world everybody needs to make sure their language in any document investors might read is accurate.
If only I had a nickel for every time I heard that. Of course, Microsoft isn't without its impressive bits. Photosynth takes turning pictures into walk-through panoramas to a whole new level. It is revolutionary in that market.
On another level, I just can't trust the competency of a company that would make the absurd design decisions related to Vista's network slowdown in the presence of media playback.
Vista is the platform for some incredible stuff.
Yep, all of the above media will be wrapped in Vista's ingrained DRM and give people headaches for years.
He turned off Vista’s User Access Control - which means he now has no more security than XP SP 2 shipped with.
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