Microsoft Reports Record Revenue and Earnings

arrivnet ^ | 1/27/2005 | PRNewswire

[KwasiOwusu]

REDMOND, Wash., Jan. 27 /PRNewswire-FirstCall/ -- Microsoft Corp. today announced record revenue of $10.82 billion for the quarter ended December 31, 2004, a 7% increase over the results in the same period of the prior year. Operating income for the second quarter was $4.75 billion, which was an increase of $3.27 billion over the same period in the prior year......

"Our record revenue came from across-the-board strength in both our business and consumer segments," said John Connors, chief financial officer at Microsoft. "And our long-term approach to growing new businesses is paying off. Home and Entertainment delivered its first profitable quarter and all three of the company's emerging businesses combined generated a nearly $700 million improvement in operating results compared to the second quarter of last fiscal year."

The Server and Tools business grew 18% versus the prior year's comparable quarter. Customer adoption of SQL Server(TM) remains particularly robust with over 25% year over year revenue growth. During the quarter, Exchange 2003 marked its one-year product launch anniversary and has had the fastest adoption of Exchange licenses ever. Customers who acquired Microsoft server products during the quarter included Eastman Chemical Company, Hewlett-Packard Company, Morgan Stanley and Premera Blue Cross.

[KwasiOwusu]

Mighty Microsoft continues to grow from strength to strength, defying all nay sayers and the ankle biters who keep promising to "put Microsoft out of business".

With Servers growing at a solid 18% and even the XBOX now profitable thinks to Halo 2, with record revenues and record profits, Microsoft looks stronger than ever.

[meyer]

Looks like Linux has them right where they want them. ;)

[RightWhale]

Yeah, it looks strong. Will the stock ever take off?

[Terpfen]

Pst... an $84 million profit on $1.37 billion revenue for the Entertainment and Games division does not confidence create. Halo 2 sold 6.5 million copies and the Xbox outsold the PS2 since August (thanks in part to Sony's strategy of deliberately undersupplying the market to create demand in anticipation of their PS2 redesign), yet they only made an $84 million profit?

You can get the E&G division isn't celebrating, just wiping their brows.

Now let's see how the rumors of Microsoft ceasing Xbox manufacturing in anticipation of the Xbox2's release turn out.

[Terpfen]

In regards to my #4, I meant to type "bet," not "get," when I said "You can bet the E&G division isn't celebrating."

Sorry for the typo.

[KwasiOwusu]

"Looks like Linux has them right where they want them. ;)"

Oh yes.
Linux is strongest in servers, and guess what? Microsoft had one of its strongest revenue growths in servers.
Yep. Linux is hurting Microsoft alright. LMAO!!

[BurbankKarl]

When is the next $3 dividend payout!

[Blue Highway]

Now this will give Microsoft the go ahead to double the price on XP 64-bit and the rest of their OS's. Linux does pose a threat, a very small one.

[HardStarboard]

Keep talking it up Kwasi - I got a bunch of MSFT and I like the help!!

It is hard to fathom why the stock has been so flat for 3 years because Microsoft, while challanged everywhere, still dominates, or turns in credible performances, in almost every sector that they compete in.

Frankly, I think they need better spokesmen! Ballmer is a disaster as the public relations face of the company! And Bill ain't much better!

You ought to apply for the job!

[dilbert80]

If only they could create a version IE that acutally was secure, one can dream

[KwasiOwusu]

"Pst... an $84 million profit on $1.37 billion revenue for the Entertainment and Games division does not confidence create"

XBOX turning in its first profits creates plenty of confidence alright.
Last year, CFO Connors predicted that XBOX wouldn't even be profitable at all in this iteration.
Game consoles always make losses or low profits to start off with, until they get well established.
With XBOX live now having 1.4 million users, a very adequate installed base, games flying off the shelves, and even more great games coming this year, the XBOX will just grow from strength to strength right into when XBOX 2 is released.

Besides Microsoft can afford it.

With a record net income of a massive $3.40 Billion, Microsoft easily makes far more profits than Sony or Nintendo and can outlast them in any price war.

[Izzy Dunne]

If only they could create a version IE that acutally was secure

Why should they? Most people will buy MS whatever they put out.

[KwasiOwusu]

"Keep talking it up Kwasi - I got a bunch of MSFT and I like the help!! "

LOL!
You are right of course.
The stock hasn't done great in the past 3 years.
If you've had it for say 10 years, you are still laughing.
Having said that, The Nasdaq is down from was it 5000, to its current 2000.
That is a drop 60%.
So a lot of tech stock prices are far lower than they were.
Just look at Sun Microsystems for example.
At least Microsoft realized that and started paying dividends.

[KwasiOwusu]

Next dividend is in March I believe, but no $3. LOL!
I think there will be more special dividends as the cash pile builds up again,but it won't be for a few years yet.

[dennisw]

You are non stop shill for M$. What's your self interest in this company? Has the stock been going up?

[EagleUSA]

Now this will give Microsoft the go ahead to double the price on XP 64-bit and the rest of their OS's. Linux does pose a threat, a very small one.
======
True, but MS does have to be careful, since its pricing structure is rising, especially in its OFFICE suites, since it is creating more of an incentive to outsiders to compete as a few are already. Regardless of MS's momentum, the bigger they get, and the more costly they get, could be a entre to a large consortium to finally create another powerful, user-friendly OS for the PC, one that would have much greater market appeal than Linux, which is still too technical at the interface for the common computer consumer.

It could happen... :-)

[KwasiOwusu]

"You are non stop shill for M$"

M$?
Tut, tut. Not nice.
It's Mr Softee to you, sir.

[Blue Highway]

I heard after the SP2 update the version of IE is better somehow, but it now escapes me how that is possible. Just a more secure crappy browser.

[Terpfen]

"XBOX turning in its first profits creates plenty of confidence alright."

Not for me. If I was a stockholder, I would be very interested in Microsoft's business model for the Xbox2, and if it didn't satisfy me, I'd consider selling some stock. Microsoft is using its E&G division as a wedge to get into the home theater market, but I question the wisdom of using a console that's relied on two games--Halo and Halo 2--to make any marketplace ripples.

"Game consoles always make losses or low profits to start off with, until they get well established."

Yes and no. Nintendo has managed to make profits on every console it's sold since the NES. It's Sony who adopted the "lose money on hardware, gain money on software" model. The problem is that Microsoft hasn't even gained money on software sales except for this year, and the gain--in the face of Halo 2, the most pre-ordered game in history, which raked in more money on its opening day than most movies do, and sold 6.5 million copies to date--is miniscule. I'm glad they've finally posted a profit, but if it took one of the best-selling titles in videogame history to do it, they have problems.

"With XBOX live now having 1.4 million users, a very adequate installed base, games flying off the shelves, and even more great games coming this year, the XBOX will just grow from strength to strength right into when XBOX 2 is released."

Xbox Live stagnated at 995,000 users for about a year, and it again took Halo 2 to bump the number of subscribers up. Meanwhile, depending on which report you look at, more people use the PS2's online capabilities.

"Besides Microsoft can afford it."

Tell that to their shareholders, who are getting increasingly nervous about the Xbox.

" With a record net income of a massive $3.40 Billion, Microsoft easily makes far more profits than Sony or Nintendo and can outlast them in any price war."

Except that we're talking about the gaming industry, and Microsoft's revenue does NOT come from the gaming industry. Brute forcing the Xbox into the market will not work.

I own an Xbox. I have four games for it: Halo 2, Soul Calibur II, Ninja Gaiden, and Halo. Meanwhile, I've owned my PS2 for about a year and have around 16 games for it, in a far wider variety of genres than the Xbox offers. The Xbox was Microsoft's foot in the door regarding the game industry: stop trumpeting it as a magical success. Xbox2 stands a chance of being a success: Xbox will go out in a year as a console that had some good hardware ideas, bridged the gap between PCs and consoles, but couldn't even trump a weakened Nintendo. Microsoft's proved it can at least stand the gaming industry--now it has to try to become a serious competitor in it.

Tecmo and Bungie can't save them forever.

[HAL9000]

Earlier today: The Rapist meets The Runt