Microsoft had Google-like results
Net income was $4.29 billion, or 45 cents a share, compared with $3.48 billion, or 35 cents, a year earlier, Sales surged 27 percent to $13.8 billion. Analysts had expected profit of 39 cents and sales of $12.57 billion, according to Thomson Financial. Shares soared over 9% in after-market trading.
Of course, the world's largest software maker, which until now was in Wall Street's dog house, couldn't have been more pleased. "This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999," said CFO Chris Liddell, in the earnings release. "Operating income growth of over 30% also reflects our ability to translate revenue into profits while making strategic investments for the future."
So does this mean that Wall Street is now going to get off Microsoft CEO Steve Ballmer's back about the billions the company is spending to catch up to Google Inc. (NASDAQ: GOOG)? Not very likely. One quarter does not make a trend even with its recent deal with Facebook.
But there is plenty for investors to like in the quarter. Vista sales seemed strong and the company hasn't been aggressively cutting xBox prices which has helped profitability, RCM Capital Management's Walter Price told Bloomberg News.
There is one perplexing side to the strong tech results this earnings side. If consumers are so worried about the future, how come they are willing to buy things like the Xbox, Vista and Apple Inc.'s (NASDAQ: AAPL) iPhone. Aren't they worried about housing, energy costs and life in general? Maybe they are so focused on their tech toys that they don't care about the rest of the world. Who knows.
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Reader Comments (Page 1 of 1)
10-25-2007 @ 10:22PM
john said...
Just a note to your last comment , I think that when people are depressed they tend to over spend , and b) there is a strong rich/poor element
and 1000000 people buying Iphones in a country of 350, 000,000 ??? I just think apples market cap really needs to be looked at in relation to cash in the bank and NET profit . 2 billion a point ? I think when the pain comes it will be dot.com pain.
MSFT is solid 59 billion rev, wow , and the EU so what " soon it will be PAY AS YOU GO . they won't even have the software - 5 years - count on it. and China get ready to pay full price .
10-26-2007 @ 1:02PM
John said...
I think a lot of technology is pretty well protected from the problems in the economy. An iphone or an xbox is very inexpensive compared to a car or a home and the fascination with new technology offers some escape from the problems with the overall economy.