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.
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