Microsoft has record revenues, outlook disappoints
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Highlights
- Revenue of $15.84 billion for the Q4 - ending June 30, 2008, an 18% increase over the same period in 2007.
- Operating income and diluted EPS for Q4 were $5.68 billion and $0.46 - growth of 42% and 48%, respectively, over the same period in 2007
- $1.1 billion charge in Q4 related to the expansion of the company’s Xbox 360 warranty coverage.
- Online Services Division continues to loose money - $488 million for the quarter and $1.233 billion for the year despite some interesting initiatives - offering users free iPods for using Live Search! Yes you read it right - it’s iPod not Zune!
- Strong Growth in the Entertainment and Devices division - XBOX 360 tops 1.3 million units for the quarter and 8.7 million units for fiscal year 2008, compared with 6.6 million consoles during fiscal year 2007.
Microsoft Corp. announced revenues of $15.84 billion for the fiscal fourth quarter ended June 30, 2008. For the fiscal year ended June 30, 2008, Microsoft announced revenue of $60.42 billion, an 18% increase over the prior year.
“Looking forward, despite difficult economic conditions, we will build upon the momentum exiting fiscal year 2008 and expect to deliver another year of double-digit revenue and earnings growth in fiscal year 2009.” said Chris Liddell, chief financial officer at Microsoft.
Wall street however was disappointed with the outlook for fiscal year ending June 30th, 2009. Microsoft provided the following guidance
- Revenue is expected to be in the range of $67.3 billion to $68.1 billion.
- Operating income is expected to be in the range of $26.3 billion to $26.9 billion.
- Diluted earnings per share are expected to be in the range of $2.12 to $2.18.
Microsoft shares have been down 6% since the earning release. A big worry for the company has been their Online Services Division that has been loosing money for the company. Microsoft has been desperately seeking ways to fight with Google in that market and even made an unsuccesful bid to acquire Yahoo. The drama over Yahoo’s acquisition still continues and Microsoft has sought a bed partner in Carl Icahn, the billionaire investor with a significant shareholder in Yahoo. To boost it’s search prowess, Microsoft recently acquired Powerset, a semantic search engine with natural language capabilities.
Photo Credit: STAN HONDA/AFP/Getty Images
