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Microsoft beat Wall Street expectations today when it announced its fiscal 2Q08 results:
Microsoft Corp. said Thursday that earnings jumped 81% for the December quarter thanks mostly to strong sales of its Windows software, and the software giant raised its outlook for the full fiscal year ending in June.
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Microsoft said net income for the period ended in December rose to $4.7 billion, or 50 cents a share, from $2.6 billion, or 26 cents a share in the same period a year earlier. Meanwhile revenue rose 31% to $16.37 billion.
Analysts on average have been estimating Microsoft would post earnings of 46 cents a share, on $15.95 billion in revenue for the quarter, according to Thomson Financial.
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Based on strong second-quarter results, the company raised its outlook for the full fiscal year ending in June. Microsoft said it now expects earnings between $1.85 and $1.88 a share for the year, and revenue between $59.9 billion and $60.5 billion. Analysts have been expecting earnings for the full year of $1.81 a share, and revenue of $59.36 billion.
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The company said its client unit, which includes Windows, posted a 68% gain in revenue in the second quarter, to $4.34 billion.
Note that the big gain for Windows client is partially due to the large revenue deferral a year ago, When that is added back in, the client revenue growth was only 18% and overall revenue growth was 15% instead of 31%. Note also that foreign currency exchange rates added 3% to revenue overall.
Below are the segment breakouts with some brief commentary based on the 10-Q.
If it is January it must be time for Microsoft’s Government Leaders Forum Europe where Microsoft regales the assembled bureaucrats with the latest computer technology. This year, Microsoft is pushing the Citizen Service Platform (CSP) which is “an approach to help governments of all sizes more responsively deliver services to citizens via the Internet.”
The Citizen Service Platform doesn’t involve any new products – it is a collection of tools and templates that customize Microsoft’s Windows Live, Office Live, Virtual Earth, Windows SharePoint Services, Office SharePoint Server, and Dynamics CRM for government use. That approach is typical for Microsoft and most other large vendors targeting vertical markets.
Microsoft is holding a private Virtualization Deployment Summit today and tomorrow for Microsoft customers and partners. An uncharitable view is that it is all fancy footwork to distract from the late and featured reduced Hyper-V (formerly Viridian), but there was some interesting news including the acquisition of Calista Technologies.
Microsoft has completed the acquisition of Calista Technologies, a leading provider of graphics technologies for next-generation desktop and presentation virtualization solutions. Calista software improves the user experience of 3-D and multimedia delivery for Microsoft multimedia applications, virtualized desktop deployments, and server-hosted virtualized desktops or applications using Windows Server Terminal Services.
Microsoft also finally backed off on the End User Licence Agreement (EULA) prohibition of the virtualization of Home Versions of Windows Vista which had caused adverse comment when it was revealed last year and was clearly an annoyance for developers (not to mention Mac users) although Microsoft had claimed security risks. Those concerns have apparently been allayed.
Finally, Microsoft renewed their vows with satellite Citrix, the long time provider of Microsoft-based thin client solutions and proud new owner of XenSource, and promised a new virtualization marketing push based on Windows Server 2008.
Microsoft today announced that they nabbed Disney CIO Tony Scott to serve as their new CIO replacing the unrelated Stuart Scott who left Microsoft under a cloud in November.
