Microsoft beats profit target thanks to Vista, Office sales


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SAN FRANCISCO (MarketWatch) - Microsoft Corp. said late Thursday its fiscal third-quarter profit rose 65%, as the company benefitted from initial sales of heavily-marketed new products including its Vista operating system. The world's biggest software maker said it earned a record-high $4.93 billion, or 50 cents a share, in the period ended March 31, compared to $2.98 billion, or 29 cents a share, during the period a year earlier. Meanwhile revenue rose to $14.4 billion from $10.9 billion. Analysts surveyed by Thomson Financial had expected Microsoft to earn 46 cents a share, on revenue of $13.89 billion. Microsoft (MSFT : Microsoft Corporation

Source

So it appears Vista and Office are not duds anyway eh...

see.. news like this really makes me think the register is full of sh**

link

well, regardless of the quality of "The Register", did you actually read the article you linked to? The Register might be right about this, and they might be wrong. However, the article you linked was pure crap. Microsoft never admitted to any failure (says so in the article), and so far just about every report from them regarding Vista has been very positive. So, whether or not you like The Register (I really have no opinion), don't put it down because it's information conflicts with that crap you linked to.

I don't see how the register would be wrong about this, considering they'd just be reposting numbers straight from MS's mouth. You guys again are looking at the situation like the whole marketplace is made up of people like you who care about nitpicky details in an OS. Most people don't, and that's why it's not going to get anywhere near failing.

And the guy who posted that link, you posted a link to an article written in the inquirer...:rolleyes:

-Spenser

The register referred to Windows Vista as Windows Me 2, repeatedly, any "news" site that does that has terrible journalists.

Where? I saw an Inquirer article that did that, but not a Register one.

Don't get me wrong, I'm not defending the Register at all. I don't know anything about them really. It just seems to me like most of the people criticizing this article are doing so for (seemingly) unjustified reasons.

n the weeks before Microsoft's quarterly earnings release, reports abounded of security problems with the new Windows Vista operating system. And talk was rife that myriad software programs don't work well with Vista. It was enough to give the impression that Vista, launched in January, wasn't selling all that well. Microsoft's fiscal third-quarter results, reported Apr. 26, paint a different picture.

Revenue in Microsoft's (MSFT) Client Division, consisting primarily of Windows sales for PCs, hit $5.3 billion, a 67% jump over a year earlier. That includes $1.2 billion in deferred revenue from presales of Windows Vista, money paid by customers before the quarter started but not counted in results until the product shipped. But even without that spike, the group's sales climbed 17%. In other words, Vista sales growth topped Microsoft's estimates of overall PC unit sales growth, which came in between 10% and 12%. That's largely because 71% of customers opted for the high-priced premium editions of Vista.

And while some corporate customers still opt for the predecessor Windows XP when they buy new computers, for software compatibility reasons, a remarkably large number are taking the new operating system. Microsoft says 85% of Windows sales are Vista, outpacing sales of XP at the same time in its life cycle.

Beating Expectations

Vista wasn't the only new product that powered results. The 2007 Microsoft Office system, the group of products led by the new Office productivity software, which launched alongside Vista, posted surprisingly strong numbers. Sales in the Microsoft Business Division, consisting largely of Office, hit $4.8 billion, a 34% gain. Like Windows, Office benefited from about $500 million in deferred sales. But even without the bump, the division's sales would have jumped 20%. "We exceeded our revenue expectations by about $200 million," Microsoft Chief Financial Officer Chris Liddell said during a conference call discussing results.

Vista and Office gains translated to a quarter that surpassed Microsoft's earlier forecast and analysts' expectations?and they augur stronger results this year and next than Wall Street was predicting. Microsoft increased its guidance for the fourth quarter and suggested that results in fiscal 2008 might come in ahead of analyst projections.

The company now expects to report fiscal 2007 sales of $50.9 billion to $51.2 billion, up 15% to 16%. Just three months ago, Microsoft was guiding to a more conservative $50.2 billion to $50.7 billion in sales. The company now expects earnings per share for the fiscal year to land between $1.48 and $1.50, up from its earlier guidance of $1.45 to $1.47. Microsoft also offered up its first guidance for fiscal 2008: The company expects $22 billion to $22.5 billion in operating income on sales of $56.5 billion to $57.5 billion. Earnings per share should come in between $1.68 and $1.72.

This guidance comes on top of a quarter that Liddell says left him "extremely pleased." For the period, operating income climbed 69%, to $6.6 billion on sales of $14.4 billion, a 32% gain. The deferred revenue goosed the top line with an extra $1.7 billion and boosted net income by $1.1 billion. Even without those gains, revenue would have climbed 17%, remarkable for a company Microsoft's size.

Searching for Market Share

The only real blight came in the online services group, the division that competes head-on with Google (GOOG). But even there, Microsoft's fortunes look brighter. The company continues to trail Google in Web-search market share. But it seems to have reversed the slide, garnering 10.1% of U.S. searches in March, up from 8.9% in January, according to market research firm Nielsen//NetRatings (NTRT) (see BusinessWeek.com, 4/2/07, "Where Is Microsoft Search?"). And while overall revenue in the unit climbed a modest 11%, to $623 million, hurt by a $37 million decline in the online access business, ad sales grew 23%, to $456 million. Not Google numbers, to be sure.

"They've at least stanched the bleeding," says Sanford C. Bernstein (AB) Senior Research Analyst Charles Di Bona II.

Source @ BusinessWeek

Microsoft Profit Tops Forecasts with Help from Vista License Upgrades

boosted by revenue booked on discounted license upgrades for its new Windows Vista operating system and Office 2007 software.
Microsoft deferred about $1.7 billion in revenue from its second quarter to its third quarter to account for upgrade coupons given to customers prior to the January launch of Vista and Office 2007.
"The strength of Vista is really driving this and it matches up with our model. We anticipate Vista really begins to roll out in enterprise by the end of the calendar 2007," said Fort Pitt Capital Group Analyst Kim Caughey. "We'll see meaningful uptake by businesses and Microsoft should see revenues accelerate accordingly."
well, regardless of the quality of "The Register", did you actually read the article you linked to? The Register might be right about this, and they might be wrong. However, the article you linked was pure crap. Microsoft never admitted to any failure (says so in the article), and so far just about every report from them regarding Vista has been very positive. So, whether or not you like The Register (I really have no opinion), don't put it down because it's information conflicts with that crap you linked to.

Please, the issue with The Register is the same issue I have with Fox; nothing wrong with having an opinion, or reporting the news; the issue is when you have the likes of The Register/The Inquirer/Fox trying to pass off opinion as fact and news.

If they want to be taken seriously, report the news as-is, then down the bottom put "Our Take" to make a declarely define line between the news and the opinion of the reporter/author/news company.

The fact is, The Register seems to go overly gushy over Linux, even when it fails in areas that would have resulted in a slamming had it been a Microsoft Product - and that is where I have issues with them; their inconsistancy. If they were equally daming of all companies and products, I'd be happy, but when there is blatent bias, its not acceptable.

Please, the issue with The Register is the same issue I have with Fox; nothing wrong with having an opinion, or reporting the news; the issue is when you have the likes of The Register/The Inquirer/Fox trying to pass off opinion as fact and news.

If they want to be taken seriously, report the news as-is, then down the bottom put "Our Take" to make a declarely define line between the news and the opinion of the reporter/author/news company.

The fact is, The Register seems to go overly gushy over Linux, even when it fails in areas that would have resulted in a slamming had it been a Microsoft Product - and that is where I have issues with them; their inconsistancy. If they were equally daming of all companies and products, I'd be happy, but when there is blatent bias, its not acceptable.

No, no, I know nothing about The Register. In fact, if it's anything like The Inquirer, then I feel your analogy with FOX News is accurate. If people here feel it's of the same quality as the Inquirer, I'm willing to believe them. I wasn't defending The Register, I was merely pointing out that they were backing themselves up with a particularly poorly written article from the Inquirer, and the flaws in that.

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