Apps & Software

Microsoft Results Unimpressive

Microsoft Corp. (NASDAQ: MSFT) reported fiscal 2013 first-quarter results after markets closed today. For the quarter, the world’s largest software company posted diluted earnings per share (EPS) of $0.53 on adjusted revenues of $17.36 billion. In the same period a year ago, the company reported EPS of $0.68 on revenues of $17.37 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.56 and $16.42 billion in revenues.

On a GAAP basis, excluding deferred revenue on Windows upgrade offers, Windows 8 pre-sales and an Office offer, revenues totaled $16.01 billion.

The company’s CFO said:

While enterprise revenue continued to grow and we managed our expenses, the slowdown in PC demand ahead of the Windows 8 launch resulted in a decline in operating income. Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and Microsoft Business Division products as businesses commit to our technology roadmap.

Microsoft reaffirmed fiscal 2013 operating expense guidance of $30.3 to $30.9 billion. The company offered no other comments on guidance, but the consensus estimate for EPS in the second fiscal quarter is $0.87 on revenue of $23.01 billion, a sharp increase due to the coming release of Windows 8 and related software. For the full-year Microsoft is expected to post EPS of $2.99 on revenue of $80.06 billion.

The company noted that its online services division revenue rose 9% and that online advertising revenue rose 15%. In its entertainment and devices division, which includes the Xbox, revenue fell 1% year-over-year, but Microsoft offered no explanation for the decline.

In the Windows & Windows Live division, GAAP revenue fell 33%, though adjusting for the Windows Upgrade offer and presales, the decline was reduced to 1%. Windows 8 will become generally available next Friday, October 26th.

Operating income for the first quarter came in at $5.31 billion, down 36% from $7.2 billion in operating income in the same period a year ago.

The deferred revenue adjustment the company took this quarter made a lousy quarter look a little better. But the consensus revenue forecast for next quarter is a third higher than first quarter revenue. Sure Microsoft will sell truckloads of Windows 8, but the business doesn’t look so hot anywhere else. And lots of those Windows 8 sales will be the cheap upgrades, which won’t help revenues either.

Microsoft’s shares are down about 2.6% in after-hours trading at $28.75 in a 52-week range of $24.30 to $32.95. Thomson Reuters had a consensus analyst price target of around $35.58 before today’s report.

Paul Ausick

Want to Retire Early? Start Here (Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.