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July 14, 2006

Outlook for next week’s Microsoft earnings report

Posted by David Hunter at 9:34 AM ET.

Microsoft’s (fiscal) 4Q earnings report is due after the close next Thursday and Michael Paige at MarketWatch summarizes the Wall Street predictions:

Microsoft Corp. is expected to report next Thursday that its quarterly profit remained flat and revenue climbed just over 14% amid ongoing strength in sales of its server software and as its entertainment unit posts a revenue surge thanks to its Xbox 360 video-gaming console.

On average, Wall Street analysts expect Microsoft to report a profit of 30 cents a share on revenue of $11.63 billion for the quarter ended June 30, according to Thomson First Call. In the comparable period of last year, the world’s largest software firm also reported a profit of 30 cents a share, after adjusting for one-time items such as legal charges and tax benefits, on revenue of $10.16 billion.

Hit the link fore the details, but the net is that increased Xbox 360 sales will spike the revenues and eat up all the other segments’ profit gains since it sells at a loss.

Also, as I mentioned after the 3Q report, this appears to be the last quarter in which the results will be broken out in the glory of full 7 segment detail. Next FY looks to be just Microsoft Platform Products and Services Division, Microsoft Business Division, and Microsoft Entertainment and Devices Division which will blur some of the more interesting results.



Filed under Financial, General Business, Microsoft, Xbox

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5 Responses to “Outlook for next week’s Microsoft earnings report”

  1. Changes in Microsoft’s financial reporting -- Microsoft News Tracker Says:

    [...] Last week, I posted a reminder that Microsoft was changing their financial reporting structure and now the details have been revealed: Microsoft Corporation today announced upcoming changes in its financial reporting structure reflecting completion of previously announced organizational changes. Beginning in fiscal year 2007, the company will report its financial performance based on five operating segments: Client, Server and Tools, Online Services Group, Microsoft Business Division, and Microsoft Entertainment and Devices Division. [...]

  2. Waiting for the Microsoft earnings report -- Microsoft News Tracker Says:

    [...] At least one high-profile analyst, Rick Sherlund of Goldman Sachs, has repeatedly speculated that Vista, as the new operating system is called, will miss its January ship date. But he figures that an announcement of a delay now actually would be a plus because it will get the bad news out of the way and clear the decks for a better 2007. That would certainly spice up what promises to be a fairly ho-hum report, but it seems a little early to be announcing another slip unless it is a little adjustment to to line up with the more freshly delayed Office 2007. Moreover, the earnings report would seem to be an odd venue when as Snyder reports, There are expectations that the company will make a number of major announcements next week during its annual analyst day on the Redmond, Wash., campus; another pushback of the Vista launch could be one of them. While we are on the subject of earnings, we can also pass the time looking at what some of Microsoft’s competitors are reporting: [...]

  3. People, Technology, Ideas (PTI) » Deal or no Deal? — My opinion as to what may work for Yahoo Says:

    [...] Big mergers rarely work; potential clash in two cultures is something management will have to work vs. to concentrate on how to capitalize traffic. FORTUNE: "Sell to Microsoft. If Semel can’t buy AOL, the best move for his shareholders may be to sell the company. Both Yahoo and Microsoft’s MSN have struggled against Google to cash in on search advertising. Integrating Microsoft’s codehead culture with Yahoo’s Internet vibe would be problematic. But buying Yahoo would be a triumph for Microsoft, giving it a major beachhead in Silicon Valley. If such a merger were to occur, the combined Yahoo and MSN would have 2006 net revenues nearly equal to Google’s expected $7 billion." PTI: Microsoft is a software company; whatever else they might be claiming they are, they are first and foremost a software company.  Most, if not all of their entertainment (and online) initiatives are still grossly unprofitable. Yahoo is an entertainment company.  Search has become only secondary to its entertainment business. Why do we go to Yahoo? — not to search (Google is for that), but to check email (where, in spite of all Goggle’s whistles and bells, Yahoo is still ahead of Google mostly due to being first comer),  to check ‘MyYahoo’ with RSS feeds to see what news / blog post is hot today, to (maybe) glance at Yahoo home page to see what they highlight today. The two (MS and Yahoo) will just not merry well.  Microsoft’s market cap (290 Bil) exceeds Yahoo’s cap (37 Bil) almost 8 times.   If acquired by Microsoft, Yahoo, most probably, will follow the sad destiny of Altavista — caught up in between the corporate (often bureaucratic) agendas, it will be shuffled from one department to another and will eventually get lost in between. I personally will feel very sorry.  I like My Yahoo page and my email — they keep me sane when all else fails.  [...]

  4. People, Technology, Ideas (PTI) » Deal or no Deal? — My opinion as to what may work for Yahoo Says:

    [...] FORTUNE: "Sell to Microsoft. If Semel can’t buy AOL, the best move for his shareholders may be to sell the company. Both Yahoo and Microsoft’s MSN have struggled against Google to cash in on search advertising. Integrating Microsoft’s codehead culture with Yahoo’s Internet vibe would be problematic. But buying Yahoo would be a triumph for Microsoft, giving it a major beachhead in Silicon Valley. If such a merger were to occur, the combined Yahoo and MSN would have 2006 net revenues nearly equal to Google’s expected $7 billion."PTI: Microsoft is a software company.  Most, if not all of their entertainment (and online) initiatives are still grossly unprofitable. [...]

  5. People, Technology, Ideas (PTI) » Deal or no Deal? Says:

    [...] FORTUNE: "Sell to Microsoft. If Semel can’t buy AOL, the best move for his shareholders may be to sell the company. Both Yahoo and Microsoft’s MSN have struggled against Google to cash in on search advertising. Integrating Microsoft’s codehead culture with Yahoo’s Internet vibe would be problematic. But buying Yahoo would be a triumph for Microsoft, giving it a major beachhead in Silicon Valley. If such a merger were to occur, the combined Yahoo and MSN would have 2006 net revenues nearly equal to Google’s expected $7 billion."PTI: Microsoft is a software company.  Most, if not all of their entertainment (and online) initiatives are still grossly unprofitable. [...]

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