Microsoft Q2 earnings and outlook are up, up and away

Summary:Microsoft Chief Financial Officer Chris Lidell summed it up: Microsoft's Q2 fiscal 2008 earnings were "outstanding."

Microsoft Chief Financial Officer Chris Lidell summed it up: Microsoft's Q2 fiscal 2008 earnings were "outstanding."

On January 24, Microsoft reported earnings of $4.7 billion, or 50 cents a share, on revenue of $16.36 billion for its second quarter of fiscal 2008. Even more impressive, the company upped its guidance for the rest of fiscal 2008. Windows Vista (especially "premium" versions), Office 2007 and Server and Tools products were all big contributors in the quarter. Interestingly, 60 percent of Microsoft's sales are coming from outside the U.S. now, thanks, in part, to Microsoft's crackdown on piracy via its Genuine Advantage DRM technology.

As LiveSide.net notes, Microsoft's Online Systems Business (OSB) is still losing money. "While the Online Services Business (MSN + Windows Live) reports a $245 million operating loss for the quarter, this is down slightly from the $265million loss repoted in Q1," LiveSide said. OSB costs were also at record levels -- $1.1 billion -- LiveSide added. That's a lot of server racks... or whatever it is OSB is spending on....

Microsoft is still saying it expects to be in "investment mode for the foreseeable future" with its OSB unit -- which means Microsoft expects it still will be years until it turns a profit.

Topics: Microsoft, Banking, Operating Systems, Software, Windows

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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