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Microsoft Misses Quarterly Revenue Projection
monsterhead78 wrote to alert us to a BusinessWeek article discussing Microsoft's uncharacteristic miss of its own fiscal projections for the third quarter. From the article: "Three months ago, the software giant said it expected revenue for the period to come in between $9.7 billion and $9.8 billion. But when the company released results Apr. 28, it came up short. Microsoft (MSFT ) rang up just $9.62 billion in sales, a 5% increase from the year-ago quarter."
they haven't released anything new, except for free patches to fix broken software...
Here's an excerpt from the AP feed:
Microsoft shares rose 85 cents, or 3.5 percent, to close at $25.30 in Friday trading on the Nasdaq Stock Market.
The company reported its fiscal third-quarter earnings after financial markets closed on Thursday.
For the quarter ending March 31, the Redmond, Wash.-based company earned $2.56 billion, or 23 cents per share, up from $1.32 billion, or 12 cents per share, a year ago.
Analysts surveyed by Thomson Financial were looking for the company to post earnings of 32 cents per share on sales of $9.83 billion in the latest quarter. The company would have met earnings expectations, except for legal charges of 5 cents a share and a 4-cent-per-share charge for the expense of stock-based compensation required under new accounting rules.
Revenue is important but profit even more so. MSFT closed up today 3.48%
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Obviously it is because of linux!
Finally the giant is beginning to fall!!!
hmmm, only 9.6 billion left to go.
Seems like that isn't exactly poor performance since it's a) less than 1% below the projected sales and b) an increase from last year. I don't see the point.
Time to start 20 years of "Microsoft is dying" trolls.
Just another way Microsoft is copying Apple.
-- I'm old enough to have lived through six different meanings of the word "hacker."
Your revenue increased, but slightly less than you expected it to be!
Take *that*, evil empire!
LOL, take that Microsoft! ONLY 9.62 BILLION dollars! How you like dem' apples?!?
It sux to be them.
There's also this Register piece, which has a different take on things.
Interesting to me was this quote:
Microsoft said that its home division - which includes Xbox - turned a profit for the first time, as did MSN.
So, if sales went up 5% from last year, how much higher can it go? How many more copies of windows do they need to sell? Or will Microsoft metamorpahsize into a service company? It was not that long ago I was reading that MS was going to stop selling Office, and start renting it. Only way to use it is to be on-line or something dumb like that.
Rosco: "If brains were gunpowder, Enos couldn't blow his nose."
... missed by 0.009%. MSFT stock up by 3.48% on the day. Oh my! this is quite the story. I'm not quite sure that the lead story quite captures the essence of it though.
while $8E7 is a lot to us mortals, they were only off by less than 1%. What is the big deal?
The toad can't burp - and for some reason can't fart either, so it swells up and eventually explodes. --Anonymous Coward
Languishing? They posted over 9 BILLION in sales. They came a few million short on a projection. Excatly how do you prove that Microsoft's stock is stagnating? they closed today up over 3 points.
So we're talking about an 80 million dollar miscalculation, out of 9.7 billion dollars (just over 0.8%). I know these are big numbers, but in the grand scheme of statistics, is this more than just a statistical anomoly? Or are the accounts not even supposed to be that little bit wrong ?
I would love to see MS taken down a notch or two, but I have a hard time believing this is more than just wishful thinking on the part of some parties. If we see more than a 1% reduction in successive quarters, then I'll agree we're onto something. But till that time, I'll just keep hoping
Darn, instead of a HolyOhMyFuckingGod!!-Truckload of cash they just made a simple OhMyFuckingGod!!-Truckload this quarter
Well sucks for them...I guess.
Artist will always make art.
(9.8-9.62)/ 9.7 = 0.18/9.7 = .018556
Oh wow, Microsoft's sales got overestimated by 1.8%. This _MUST_ appear in Slashdot!</sarcasm>
Please disregard. I re-read your post and it makes sense the way you had it. My bad.
We need a moderation for "no basis in reality".
Even more disturbing, who would have guessed 5 years ago that /. would be filled with Apple fanboys while Free Software zealots decrease in number? :)
"Who would have guessed 5 years ago that Apple would be Wall street's darling and growing its stock by leaps and bounds while Microsoft software is languishing its stock is stagnant and not meeting expectations?"
Microsoft grew earnings 5% over last year, a very impressive feat considering that they haven't released a new OS since 2001.
They are a mature company, and they have achieved market saturation in many of their sectors. Any growth at all is impressive.
Moreover, they still make about 3.5 times more revenue per year than Apple - without a strong hardware business.
In our organization, spending on software has declined almost to nothing. We no longer buy MS Office products because OpenOffice.org has eliminated the need to do so; all of our critical infrastructure runs on Linux and FreeBSD; and the desktops and workstations that run Windows continue to run the same versions of Windows that originally came on those workstations. Therefore, we use Windows 98, Me, and XP Personal, which came on several eMachines we bought for office use. And the funniest thing is that while the Linux and FreeBSD boxes continue to use the latest stable and release versions of the OS and software, the Windows boxes have not been upgraded, and there are no plans to do so. It would only be costly, and would offer us nothing in exchange. And I believe the same applies to countless organizations the world over. People will simply not continue to upgrade hardware and software forever.
That, my friends, is why Microsoft missed its quarterly revenue projection.
First, I think I am done buying M$, but having said that, I had an idea.
Why does not Microsoft not release their OS, but hold it for a few months, have a large beta group of testers. Fix the bugs. Have their own in house hackers try and break in, make more fixes. Load it with lots of different kinds of software and fix whatever problems they have.
Instead it feels like they release a product too early. Service pack 1 followed by 2 and 3 and 4.
My second complaint is these service packs are too large for some people with dial-up. If AOL can have 100's of CD's in every computer store, why can't Microsoft have their free service patch CD's in stores??
Rosco: "If brains were gunpowder, Enos couldn't blow his nose."
If Microsoft were a blue chip stock, this would be important. BUT ... Microsoft is a commodity stock - so missed earnings are pretty much irrelevant - because until recently Microsoft has not paid a dividend, and investment stocks usually react differently to bunged projections (cause it means you didn't get paid.) All Microsoft has to do is announce some vapourware and the stock price goes up. Such is the nature of commodities.
/\/\icro/\/\uncher
I think you need to bone up on how to read financial statements and pick stocks.
For example, MSFT has a P/E of 24.5. Dor a good explanation of P/E, look here
By comparison, AAPL's is 40 and that other Slashdot darling, GOOG's, is at 88!
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
I've worked as a cashier, but I've most certainly never put money in the till to make the balance. Usually on my shifts, I was never off by more than a dollar, and usually under $0.20 (giving away pennies, etc). The company I worked for didn't expect a perfect balance ever. It was only when the amount was significant that any sort of investigation was done. (for example, being $10 short would warrant a review of the security tapes)
Google News:
Microsoft profits jump to US$ 2.56 billion this quarter (Earthtimes.org)
Microsoft Third-Quarter Profits Double (Yahoo News)
Microsoft: The Cash Machine (Motley Fool)
Slashdot:
Microsoft Misses Quarterly Revenue Projection
It's almost as if there's some bias or something...
I just find it comforting, with my deflating techie salary and rising energy prices, that at least somebody is having a good time.
To put it in perspective, VA Software, the company that owns Slashdot, is trading at 1.37/share ... down from their 52-week high of 3.17. Those that live in glass houses...
I'm beginning to think you never worked as a cashier either. You'd never get the till closed with $80 million in there.
http://www.rootstrikers.org/
Revenue (i.e., top line) growth is necessary for the long-term growth of the company. Earnings (i.e., bottom line) are more representative of the short term quarter-to-quarter health of the company.
When was the last time that Microsoft came up short on revenue for a quarter?
I think confused investors were thinking Microsoft released Tiger today. :-)
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I don't know why I even both to post this b/c I haven't posted in months, but can't this site be just tiny, itsy bit less slanted? I understand that MS is the antithesis of Open Source and that is what this site is about, but please spare me this type of story.
No one here would give a crap about MS corporate results, but b/c they miss by a couple percent it becomes a story. Can't there be a little bit more reason? Not everything in the Windows world is terrible and every aspect of Open Source is not perfect. Maybe that is why I like Ars Technica better, b/c they are much more reasonable...
If you dig a little deeper on this one, you will see that the cause of the revenue miss is due to currency flucations (the dollar moved the reverse of their hedges, strengthening).
What was important - and eye opening here - is that even with a miss on the revenue side, earnings were double what they were in the year ago quarter.
While you can't continually grow the bottom line (earnings), with a shrinking top line, it is positive and says something good when a company has robust earnings even in the face of declining revenues.
If you break down the revenues you find something interesting. Strong improvements in both Server products and XBox. Both of these are positives for Microsoft and are in line with their long-term directions.
Yours,
Jordan
So they missed their revenue proejctions by a fraction, yet they posted double the profits from last quarter by halving their R&D Budget from 3 billion to 1.5 billion. And slashdot doesn't pick up on that.
My question, since R&D covers almost all new development in the company,
Which products/programs where cut?
Have they dropped their "Inovate" slogan?
Totally disregard myself, the parent. I'm not exactly sure what happened there or how that sentence came out in typing. Hell, ignore this one too.
Wheel in the sky keeps on turnin'.
MSFT, Fannie-Mae, and many other public corporations are now (finally) under the onus of section 404 of the Sarbanes-Oxley Act. They can no longer "smooth out" the squiggles on their profit line charts that reflect the true nature of business -- now the corporate officers must certify both the internal financial accounting process AND the quarterly results posted with the SEC.
Juggling the numbers to keep the shareholders numbly ignorant is now a criminal act that the corporate officers are responsible for. Accounting mechanisms for pushing/pulling income spikes and sags into another quarterly report are no longer tolerated.
Any company with large corporate and government customers is bound to have variations in their accounts receivables, some of which will break the rising tide of their profit line charts. There (usually) isn't anything really wrong with these corporations. It's just that the accounting equivalent of cosmetic botox injections are no longer allowed. If this drives shareholders into the mentality of a longer term financial view, like 1, 3, and 5 year outlooks, it would not be a bad thing for the economy as a whole. It will, however, suck rotten eggs for all the corporate officers whose bonuses and incentives are tied to their quarterly results. I will weep giant crocodile tears for them -- NOT!
Post hoc, ergo propter hoc?
Perhaps the poor performance of Sun and HP's stock has more to do with it having been run up in the internet bubble, and then having to compete with their own products on the aftermarket as the dot coms were liquidated.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."