Microsoft Surging On Earnings (MSFT)

Microsoft (NASDAQ:MSFT) has posted earnings of $0.45 EPS on $13.76 Billion in revenues.  First Call had estimates at $0.39 EPS on $12.57 Billion in revenues. 

• The company offered guidance of $0.44 to $0.46 EPS on $15.6 to $16.1 Billion in revenues and for Fiscal JUN-2008 it put EPS at $1.78 to $1.81 anon $58.5 to $59.7 Billion in revenues.   First Call has next quarter estimates at $0.44 EPS on $15.6 Billion revenues and Fiscal JUN-2008 at $1.73 EPS and $57.4 Billion revenues.

Shares closed up 2.3% at the highest close in recent years at $31.99 and traded as high as $32.22 today.  Shares are up roughly another 5% in after-hours at $33.60.  Maybe it can reach that $36 target 24/7 Wall St. assigned after all, albeit a bit late.

It did show a breakdown of unit results: $1.92 Billion in entertainment, $4.1 Billion in client, $2.9 Billion in services & Tools, $671 million in online services business, $4.1 Billion in Microsoft Business Division.   On Windows Vista: "Customer demand for Windows Vista this quarter continued to build with double-digit growth in multi-year agreements by businesses and with the vast majority of consumers purchasing premium editions," said Kevin Johnson, president of the Platform and Services Division at Microsoft.  Microsoft’s businesses of Client, Microsoft Business Division, and Server and Tools grew combined revenue in excess of 20%, and experienced robust demand for Windows Vista, the 2007 Microsoft Office system, Windows Server, and SQL Server.

• With a spin-off of Bungie Studios there may be more to look at.
• $300 million in Halo 3 in first week.
• HealthVault is a move into healthcare.
• It is going deeper into virtualization.
• Would Microsoft acquire Yahoo!?
• A post-Gates Microsoft?

Jon C. Ogg
October 25, 2007