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Microsoft Posts Record Earnings
sriram_2001 writes "Microsoft has just had a record quarter where their profits have doubled from the previous quarter. Total sales are at $10 billion, exceeding both internal and external expectations. Microsoft has attributed the rise in earnings to increased server sales (where *nix-based systems are supposed to be doing well) and more XBox units being sold. For a company that most Slashdotters would say is on the decline, Microsoft sure has weird financial results!" To put it in perspective, Microsoft's income is about the same as New York State receives in taxes - below California, and well above the other 48 states.
Server Sales 18% up - thats quite a share :-). Especially if you regard how hardware sales of servers developed in the end of last year:
Hewlett-Packard: +21%
Dell: +28%
IBM: +36%
(Gartner quote)
http://www.itfacts.biz/index.php?id=P243
There have to be quite a couple of linux- and other boxes, if Microsoft ist just +18%.
Anybody got more precise infos on actual sales of iron?
btw: Profits are also significantly up because of the cut in personell.
Details on different aspects of server sales: http://www.itfacts.biz/index.php?id=C0_5_1
The increase in earnings is a result of lower compensation per share- instead of offering a 2-to-1 split or dividends to their investors, Microsoft kept the cash on hand. At the same time, demand for Windows and Office products dropped.
Gentlemen, you can't fight in here! This is the War Room!
Deserve what they get? You mean like they deserve to save money when they play it smart and buy one server that handles the load just fine when the alternative was multiple servers that still struggled to do it, plus cost you a mint?
Yeah, they do deserve what they get.
Not all servers need five 9's uptime, you know.
The numbers are real alright but they do say something else:
I can't find the actual data of this quarter, but here are the data for the last four quarters. Notice that the quarter ending 12/31/2003 is the one used for comparison by the article.
-quarter ending 12/31/2003:
revenue $10,153,000, net income $1,549,000
-quarter ending 9/30/2004:
revenue $9,189,000, net income $2,528,000.
How can they have a billion less in revenue and a billion more in income?
The answer is also there: they spent $1.4 BILLION *less* in Research and Development.
Microsoft is of course still in a dominant position, and their software still sells like no other piece of software ever did, but the real advancement from last year is a +6% in revenue (which is propably *less* than the overall market growth).
Washington bullets will simply be known as the "Bulle
WinNT to W2003 resulted in a huge upswing in MS spending in the later half of last year for my company. I was hoping for a decent rationalisation of why were were using WinNT in some of these cases (e.g. DNS??? file/print servers???), but as usually business managers have their backs up against the wall (e.g. procrastinate on spending) and just want to pay their way out of a situation when they have no choice.
And if you have to upgrade the OS (which results in lots of application regression testing, which is labour and the most expensive cost of the whole process), you may as well replace the server which is probably 4-5 years old at this point. So the upswing in server sales for the last quarter or two I would attribute to this WinNT retirement. WinNT upgrade = license fees, + labour + h/w....ironically the catalyst is probably the least expensive component in the equation.
At least, that's how it played out at the bank I work at...
John Maynard Keynes: "When the facts change, I change my mind. What do you do?"
Glad to hear it. But as an investor I would like to see their stock price tick up a bit with this news. Since their last stock split a few YEARS ago, the price has stayed in the $22-$28 range. Pretty flat performance.
My
It could just be the US $ inflating their sales. But even if these are real figures, their sales actually haven't increased much. Most of the profit is due to cutting costs. Taking inflation and exchange rates into account, we could turn this story around and say that their sales have decreased, and they've scaled back to compensate for this and expected future decreases.
That's fine and dandy to do 4 years ago. With Sarbane's Oxley in place there ain't a chance in hell you can do this anymore. These profits are legit.
Hell 2 years ago and you'd still burn for this, ever since Enron got busted the auditing firms are keeping a much closer eye on public companies.
> virii
The word you are looking for is "viruses".
For a company that most Slashdotters would say is on the decline, Microsoft sure has weird financial results!
Yeah. People were laughing at Alan Greenspan for a number of few years before that bubble burst too. I guess some of us silly Slashdotters just don't "get" the new Microsoft economy. It's ok though, you just go ahead now and keep putting your money there. After all, what could be wrong with Microsoft's accounting practices?
*** Sigs are a stupid waste of bandwidth.
NY State has budget of over $100 Billion. Most of the money for the budge comes from tax revenue, and even if you take into account NY's deficit of less than $20 Billion, you're still left with about $80 Billion of tax revenue.
Bzzt, thanks for playing.
Given when these numbers are from, most people who paid Microsoft a dime didn't have a choice.. because it came pre-loaded on the machine they purchased so that they could take work home from the office/give their kid to do homework on from school, etc.
These days, things are a little better, but it's still a bitch to get a PC without Windows, and even when you do, you have to suffer through a lot of software that, sad to say and despite the karma burn this'll earn me, simply doesn't work as well for a lot of real world tasks.
I wanna be a Linux guy. I really do.
But my job requires editing of reports with multiple people. Most of whom don't have any computer skills to speak of. Hell, they can barely get Word running. There simply isn't another option. Open Office's revision tracking is near painful to use. Trying to get it to interoperate on files from people who have bargain basement PCs and no tech background to speak of?
No dice.
That Jesus Christ guy is getting some terrible lag... it took him 3 days to respawn! -NJ CoolBreeze
This is very old commentary and information. First, to a very large degree, Microsoft has switched away from the granting of stock options as a form of employee compensation. Second, in 2003 Microsoft elected to follow the Financial Accounting Standards Board's FAS 123 rule for the proper accounting and expensing of stock option grants. Third, while there may be a kernel of truth about the accounting games played (and still played), there is no denying that Microsoft is an extremely profitable company on its own operatitng merits... the commentary's suggested rationale simply isn't sustainable and Microsoft has clearly pumped billions into it's and it's shareholder's coffers.
Microsoft's $10b is a lot, but it's nowhere near New York.
antipaucity