FY08Q2: As always, my favorite post-analysis sites for the results:
At a simple level, I feel anything that Microsoft reports is like spitting in the wind during the current financial storm. I'll be interested in hearing if we have anything encouraging to say as being a safe-haven for investors during this period, given the current releases and the upcoming releases.
Mr. Todd Bishop has a preview and nails my concern about the analysts concern of our forward looking statements. Also - though I doubt it will come up except as a generalized catch-all warning - with the EU feeling us up again to try to figure where we moved our wallet to, we have more legal uncertainty to deal with.
Update: After the release...
FY08Q1: ba-da-Boom!
FY08Q2: ba-da-BING! (or should that be, "ba-da-Cha-CHING!"?)
Channeling an upbeat attitude that could be heard as, "no, really, our poo doesn't stink," Mr. Liddell got to take lead on one of the most positive and reassuring Microsoft quarterly results conference calls I've heard in a long time. He expressed extreme pleasure over the results, as do I imagine every Microsoftie (unless you do want to point at the stinky poo of OSB and how E&D / Xbox has a deep, deep hole of billions to fill income into).
I'd say every time I heard an analyst try to give Mr. Liddell a soft-pitch opportunity to say something negative or overly cautious, Mr. Liddell was like, "Nope, things are going great, and will continue going great. Or greater."
Safe-haven for the investors' money, indeed!
Oh, and kudos to Jason Maynard for asking Liddell about the new EU actions and how that figured into Liddell's thinking. Not much of a meaty answer (well, most of the answers weren't very meaty) but it was nice to hear such a challenging question. I hope it comes up again during our Friday Town Hall Meeting in 34, though I wouldn't expect a more detailed answer.
Follow-up posts:
MSFTExtremeMakeover: Q2 FY08 Earnings. Snippet:
Short version: strong results, increased guidance, generally upbeat tone, and no really embarrassing items for analysts to question. Good job! Yes, online continues to be a sinkhole for cash. But everyone is used to that by now, and at least the top line result is semi-respectable. Yes, there's still no color on actual large scale Vista deployments. But at least client revenue and unearned remains solid. Bottom line, if last report was sufficient to get some investors to take another look at MSFT, then this one should attract others and perhaps reduce doubts that last time was merely a fluke.
Mr. Joe Wilcox: Microsoft Watch - Corporate - Microsoft Q2 2008 by the Numbers. Snippet:
Liddell's confidence may have something to do with where Microsoft makes its money. Just four years ago, the majority of revenue came from North America. Now, 60 percent of sales are outside the United States, Liddell said. For the quarter, Microsoft sales increased 30 percent in emerging markets, 20 percent in established markets like Europe and 15 percent in the United States.
Even if the U.S. economy slows down, overseas sales could offset any decreases in technology spending here.
Mr. Todd Bishop: Microsoft beats quarterly estimates, raises forecast. Snippet:
Microsoft's Online Services Business was the only one of the company's five divisions to post an operating loss for the quarter, $245 million in the red. The company's Entertainment and Devices Division climbed to a $357 million operating profit thanks to holiday video-game sales. Chris Liddell, the company's chief financial officer, said this afternoon that Microsoft is still expecting that division to be profitable for the full fiscal year, which ends in June.
And the general attitude of the rest of the reports:
- Microsoft in the Money Financial News - Yahoo! Finance: Snip: If the economy is slowing down, Microsoft isn't feeling it.
- Microsoft raises fiscal 2008 outlook for divisions Markets Markets News Reuters
- Microsoft CFO sees no spillover from US economy Markets Markets News Reuters
- Microsoft Set To Move Markets - Forbes.com
- Microsoft 2Q Profit Tops Expectations Financial News - Yahoo! Finance
- Microsoft Looks Mighty - News & Analysis - Software - MSFT: Snip: Even inside the domestic market, growth was 15% in the quarter. "You have to look really hard to find any weakness in our results," Liddell said. [Mini: aka: our poo, no stink.]
- Microsoft earnings surge; raised forecast a boon for shares - MarketWatch: Snip: Liddell told analysts not to expect a profit from online services for some time. "We see it as a multiyear journey that we're going on," he said, adding that Microsoft hopes the unit will "be at a critical mass in several years."
- Command Performance By Microsoft - Forbes.com. Two interesting snips here: (1) [Trip Chowdhry] said there was no indication as of yet that Google Docs, Google’s online office tools program, has negatively impacted Microsoft. (2) A major shift in the marketplace, Chowdhry said, is that the rapidly growing BRIC nations--Brazil, Russia, India and China--have realized that open-source software, where anyone can copy anything, is not the way a country builds core competencies in technology. Microsoft did well in BRIC nations during the second quarter.
- Microsoft profit rises 79 pct Financial News - Yahoo! Finance: Snip: "Microsoft often sets the bar low for itself," said Kim Caughey, senior analyst at Fort Pitt Capital Group. "These numbers tell me that Microsoft is seeing strength in the pipeline."
Ba-da-cha-CHING!
Now, let's be sure we don't start slipping back to our old sloppy ways, because, well, our poo does stink. Just like everyone else's.
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