Microsoft Q2 Earnings Summary

After trading hours on Thursday (Jan. 24), Microsoft announced its second quarter earnings and "guidance" for the next business quarter, and estimated earnings for the year.

Earnings were 16.37 Billion dollars* for October through December (Q2 on MSFT's fiscal year calendar); this versus a "consensus estimate" by "the street" of 15.95 Billion dollars.

* USD $ 16,370,000,000.00

Actual (net) profit was 4.71 Billion dollars, which means that it somehow cost 11.66 Billion (that's with a capital "B", now) to run the company.

Depending on how they do the accounting, of course... For example, through the magic of numbers, second-quarter revenue and profit growth rates are exaggerated when compared to results a year ago. Why? Because Microsoft "deferred" more than $1 billion in net income, based on delays in releasing Windows Vista and Office 2007.

Total sales of the Vista operating system (not 3-month sales) were reported as being over 100 million copies.

For comparison, that's equivalent to a copy of Vista for every man, woman and child in California [36.4 million], Oregon [3.7 million], Washington state [6.4 million], Arizona [6.1 million], Nevada [2.5 million], Idaho [1.4 million], Wyoming [0.5 million], Montana [0.9 million], North Dakota [0.6 million], South Dakota [0.7 million], Utah [2.5 million], Colorado [4.8 million], New Mexico [1.9 million], Texas [23.5 million], Oklahoma [3.6 million], and Louisiana [4.3 million]*.

* estimates based on 2006 U.S. Census Beureau numbers.

Or, if you prefer another number to use to put the number 100 million in context:
the July 2007 population estimate for the United Kingdom is 60.7 million. Japan: 127 million. Germany: 82.4 million.

Microsoft representatives also said that Microsoft has shipped 17.7 million 'Xbox 360' consoles since the machine went on sale two years ago (November 22, 2005).

Full Year revenue was estimated on the "conference call" to be between 59.9 to 60.5 Billion dollars by the end of the current fiscal year.

Microsoft said profit in the year ending June 30 will be $1.85 to $1.88 a share, on sales of $59.9 billion to $60.5 billion.

Photo © REUTERS/Shannon Stapleton, taken January 2007

File Under: "it's Business, not Enterprise"
Posted by Liberty Miller, 24 January 2008