Microsoft doing great.
04/19/2001 9:00:16 PM MDT Albuquerque, Nm
By Dustin D. Brand; Owner AMO
MSFT was once at $40 a share, now it's about $70.
SEATTLE - Following AOL and IBM on Wednesday, Microsoft added its stock boost Thursday to the once considered bad market.
The software giant's revenue for the quarter ended in March was up 14 percent over the same quarter last year to $6.46 billion. Net income and diluted earnings per share were $2.45 billion and 44 cents, respectively-beating analyst predictions by a full 2 cents.
"We're pleased with the results, which came in at the high end of our expectations," Microsoft CFO John Connors said in a conference call.
Right now, Microsoft is really the only Software company doing well. It really is the only stock that hasn't been touched this year by bad earnings, cut staff, or failed products.
Contributing to Microsoft's unusually good results amid a glut of losses in earnings reports from other high-tech companies, Connors cited the fact that Microsoft's revenue streams are not dependent on dot-coms or telecoms, both of which were hit hard last quarter. He also identified Windows 2000 and enterprise servers particularly the SQL Server database and the Exchange Server as strong areas of earnings growth. Finally, he mentioned changes in Microsoft's sales force that were bringing focus to enterprise sales.
Desktop applications revenue, which includes income from Office, grew 7 percent year over year, bringing in $2.41 billion. Desktop operating systems revenue, which includes Windows 2000 Professional and Windows ME, grew 16 percent to $2.05 billion. Enterprise software revenue, which includes Windows 20000 Server, SQL Server 2000 and Exchange 2000, grew 22 percent, to $1.25 billion. Consumer software, services and devices revenue, which includes MSN, reached $460 million for the quarter, up 22 percent. Microsoft's enormous cash hoard, Connors revealed, has now swelled to $30 billion.
Looking ahead, Connors set a low bar for financial expectation. For the next quarter ending in June, he predicted that Microsoft's revenues would lay in the range from $6.3 billion to $6.5 billion, with earnings per share between 41 cents and 42 cents. For the next fiscal year, which begins in July for Microsoft, he set targets for revenue in the range of $28 billion to $29 billion and for earnings per share between $1.90 and $1.94.
Connors also gave Microsoft's assessment of the PC business, the slowdown of which has negatively impacted PC manufacturers such as Dell and Gateway and chipmakers such as Intel. He described PC growth as "modest" during the latest quarter, with particularly weak demand in the U.S. Business PC growth was stronger than in the consumer sector, reversing the trend from previous quarters.
Even so, Microsoft now expects worldwide PC demand to grow in the range of 7 percent to 8 percent in the year ahead. "There are signs that the PC market could be stabilizing," Connors said.
Connors mentioned on Thursday the coming XP releases of both Windows and Office as positive factors going forward. He also cited the recent announcement of HailStorm, a major initiative to provide next-generation Web services. I will be personally working with Microsoft on several of these coming Web Services, and already have my hands on these fall release products right now.
With regard to Microsoft's Xbox gaming console, which will be released in time for the holiday shopping season, Connors warned that the business model for gaming anticipates losses on console sales. "Over time, that investment is recognized through sales of games," Connors said. Microsoft expects to do very well in the gaming business, he added, but this will be "over the long run."
Because Microsoft is essentially giving a good portion of the XBOX away, and can easily afford to, Sony and Nintendo are already showing signs of fear. Sony can't touch the XBOX as far as power, and neither can the Nintendo GameCube. Nintendo's CEO has already hinted at pulling the plug on their GameCube alltogether, obviously Sony isn't the only one wary of this entry of Microsoft in the market. Nintendo just yesterday announced a delay of their supposed GameCube Launch in Japan, Hiroshi the CEO hinted at "pigeonholing" the GameCube entirely, and Nintendo announced a complete restructuring of their Business Rules.
Further evidence showing Microsofts already dominant strength in a market they are only just entering comes from both Sony and Nintendos response to retailers regarding the XBOX.
Addressing the difficulty of the current market climate, Connors insisted that Microsoft is well-positioned. With the most support in the industry from Game Developers of any "console system", Microsoft isn't even coming close to stretching that point "well positioned" is right.
Being well positioned, the console market isn't the only one Microsoft is well positioned in. Microsoft's Windows XP, .NET Web Services and developer tools, are all launching within months of each other this Fall, 2001. This might be the best Christmas ever for the Economy and Microsoft as well.
For the first time this year, Microsoft's stock price finally climbed to close at $68 on Thursday, jumping to $72 following the earnings release after market close. Rising above that watermark surely raised a many cheers and smiles in Redmond.
10/11/01 Tuesday October 11th, 2001 XBOX Launch Date...< PREDICTION
Ontogony Recapitulates Phylogony...
<___The Dustman___> out <:msg recv>
Microsoft Xbox Web-Site
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