Microsoft Q2 earnings and outlook are up, up and away

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."

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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 has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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12 comments
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  • Same old story

    "Results in the prior year were impacted by the deferral of $1.64 billion of revenue
    and operating income and $0.11 of diluted earnings per share from the second to
    the third quarter of fiscal 2007, due primarily to technology guarantee programs.
    Without these deferrals, second quarter growth rates for revenue, operating income
    and earnings per share would be 15%, 27% and 32%, respectively."
    http://www.microsoft.com/msft/earnings/FY08/earn_rel_q2_08.mspx

    Revenue growth inline with PC market growth. Profit from windows and Office.

    Revenue growth should be better given the price increases for Vista.

    Note to competition: Attack win32 and Office revenues.
    Richard Flude
    • whats your problem?

      Can control your self that MS is making money?
      what the F is wrong with you!?
      Even though many tech companies are haveing trouble to hold their share values (Apple and Google) MS has IMPROVED their projection for the nxt quarter (thus increasing their share value).

      learn to appreciate anybody who does well.

      "Note to competition: Attack win32 and Office revenues."

      wow, no body new about it until you wrote this. Thats what the competition has been TRYING to do for the past decade and you know the market share now right??
      5ri
      • Thanks

        "learn to appreciate anybody who does well."

        "Appreciating" a company purely because it makes lots of money is quite sad.

        "Thats what the competition has been TRYING to do for the past decade and you
        know the market share now right?"

        I should have expanded my post: Develop a Win32 compatible alternative (not an
        alternative API). The alternative API has failed. The market hasn't recognised just
        how vulnerable MS is to a compatible layer (such as WINE). MS is as exposed as IBM
        was to the clone makers that gave MS it's revenue.

        Office alternatives exist but don't have the support required.
        Richard Flude
  • RE: Microsoft Q2 earnings and outlook are up, up and away

    Sun (JAVA) reported earnings today, too. MS profits were more than a billion dollars higher than Sun's total sales!
    archerjoe
  • Wonderful news for Wall Street Monopoly players

    Anybody who thinks Microsoft's financial
    position has improved after the fizzling
    flop of Vista is carrying a waterbucket full
    of holes.

    Practically all available credible evidence
    indicates that practically all the Vista
    sales they are crowing about are sitting on
    store shelves, in OEM warehouses, or have
    been replaced with something else that
    actually works. Vista is a dismal failure to
    anybody who doesn't have their head buried.

    How long can Microsoft continue the farce
    and delay the inevitable? Only the number of
    suckers and time will tell.

    The Trouble with Vista
    http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9009961

    It isn't the features you can see in Vista,
    or the lack thereof -- it's the priority
    shift at Microsoft's core

    http://blogs.zdnet.com/Berlind/?p=315

    Trouble in Vista paradise? Large software
    vendor warns of major compatibility problems
    and burdensome remedies

    http://www.microsoft-watch.com/content/vista/the_trouble_with_windows_vista_capable.html

    The Trouble With Windows Vista Capable

    http://www.microsoft-watch.com/content/vista/vista_crack_means_big_trouble.html

    Vista Crack Means Big Trouble

    http://www.247wallst.com/2006/12/more_trouble_fo.html

    More Trouble For Vista (MSFT)

    The following is an article that no longer
    exists (or at least my link to it doesn't
    work, wonder why? he he) that outlined and
    provided many links to Microsoft's
    malfeasance:

    http://malfy.org/

    Corporate Malfeasance Information
    Repository : M
    Nicknames: Microserf, Microshaft
    Information about the USA v Microsoft
    anti-monopoly trial has been found HERE.
    Have a look at Bill Gates' campaign
    contributions. (Non-Americans should realize
    these are essentially legalized bribery of
    public officials.)
    Microsoft allowed the NSA (National Security
    Agency) to build in a backdoor into Windows.
    Virtually all versions in use today are
    affected. Heise link. Alternative link.
    Microsoft has been shown to have supported
    SCO's lawsuit against IBM over Linux's
    source code. Groklaw story.
    Determined to blot out the sun one square
    inch at a time, Microsoft has filed a patent
    for a program to conjugate verbs, which is
    obviously a program that has been written
    100s of times before in computer science
    departments and elementary programming
    classes. Not to mention the popular program
    Verbix, or perhaps the older Whittaker's
    Words.
    Microsoft is trying to get removed a
    paragraph from a US higher education body's
    report. The paragraph encourages use of FOSS
    (free and open source software). Story.
    Microsoft violated Vermont's consumer fraud
    law and will pay them $4.7 million. Story.
    There is word that the Windows Genuine
    Advantage tool is actually spyware and
    therefore violates anti-spyware laws.
    Microsoft will be slapped with another clas
    action suit: story.
    Microsoft find clever way to commit arson
    and get away with it. Their Xbox's power
    supply seems rather flammable, according to
    these people. But Microsoft is blaming the
    power cable. One Swedish owner has informed
    me that this is a scandal in Sweden.
    Bill Gates, despite his company's getting
    over $1 billion per year in undeserved tax
    breaks from American taxpayers, has now made
    it clear that he doesn't want to employ any
    Americans:
    He has demanded that the H1B visa program's
    limits be dropped so that he can bring in to
    the country an unlimited number of foreignor
    workers. Link
    He has sponsored a programming content in
    India and plans to greatly expand the number
    of workers there. Link
    Microbox's Xbox 360, which clearly was
    rushed to market before the bugs were
    removed, is now widely understood among
    adult and kid gamers to have a major
    overheating problem, requiring several
    possible workarounds. Not surprisingly,
    there is now a class-action lawsuit to
    address this rather dumb mistake. Link here,
    or read MSNBC's article.
    Always trying to rake in new customers,
    Microsoft has accused Korea's third largest
    bank of piracy. The problem is, the bank's
    contract allowed for copying the software,
    and it appears M$ had been asking for too
    much money. Link.
    There were at one point something like 35
    class action lawsuits against Microsoft.
    Great company!
    Created at least these two front groups to
    lobby for its interests:
    Americans for Technology Leadership (ATL)
    Citizens Against Government Waste.
    "The antitrust settlement between Microsoft
    and the Computer and Communications Industry
    Association resulted in a $9.75M payment to
    the CCIA top official. Ed Black, CCIA
    president, received almost half of the
    $19.75M payment." Link
    Theft of $4.596 billion as "tax breaks" from
    US Taxpayers between 2001-2003, thanks to
    legally-bribed politicians, for an effective
    tax rate of only 19.4% instead of the normal
    35%. Information here.
    Supported California Proposition 64 (they
    contributed $105,000 to the effort), which
    unfortunately passed (due to fraud??). It
    prevents many just lawsuits against
    corporate criminals and was supported by
    many corporate criminals. Info here.
    Settled class action lawsuit brought by
    Californians who said Microsoft uses its
    monopoly position to overcharge for
    software. Info here.
    Microsoft lost a class action lawsuit
    brought on behalf of "permatemp" workers.
    Info here.
    Supports digital rights management which is
    a futile and increasingly Orwellian attempt
    to limit what people do with their own
    computers.
    Windows XP has built-in spyware that tells
    Microsoft what you are doing with your
    computer e.g. when you do a search it tells
    their computers what you searched for.
    Outsourcer of jobs to overseas, according to
    CNN's Lou Dobbs, at a time when huge numbers
    of US tech workers are unemployed.
    Ole Man
    • yawn,,,

      Nice rant...good documentation...Evil MS is doomed ?

      And yet, profits are up 70%.

      Pardon me, but
      I find your rant somewhat amusing. Maybe you should pitch it to Oliver Stone for a movie deal, he digs the evil conspiracy stuff.
      Boxarox
    • Schlap

      Looks like someone has nothing better to do than collect links to anti-Microsoft articles ... And surprise surprise, it's the usual rantings. Can't the MS naysayers come up with anything new?

      "Microsoft find clever way to commit arson and get away with it." Microsoft should sue whoever titled that article, if not for defamation, then just out of principle. Although the ensuing court case would just give you mob something else to complain about.

      I'm only surprised there isn't a "Vista hardware requirements" whinge in there somewhere. Sure, that would be irrelevant, but since when has that stopped any of the MS haters?
      Tok-Sic
      • Thank you Tok-Sic, and Boxarox

        WGA horror story #760745

        http://blogs.zdnet.com/Bott/?p=145

        WGA Horror Writers Plan Studio Exorcism

        http://www.deadlinehollywooddaily.com/wga-horror-writers-plan-studio-exorcism/

        http://forums.microsoft.com/Genuine/ShowPost.aspx?PostID=2053834&SiteID=25

        http://www.pcdoctor-guide.com/wordpress/?p=3102

        http://arstechnica.com/news.ars/post/20060630-7171.html

        http://www.slyck.com/forums/viewtopic.php?t=23970

        Another "old" link that I'm sure, like
        Microsoft, you don't give a flip about:

        True tales from the WGA front

        Published July 19, 2006 by Ed Bott

        From Microsoft’s Windows Genuine Advantage
        blog, May 18, 2006:

        Comment posted to that same entry, July 16,
        2006:

        [A]fter recieving a flag telling me my
        Windows XP Professional might not be
        genuine, I did the right thing and checked
        up with Microsft through the telephone
        support network.

        After speaking with five different people 2
        told me my Windows package was invalid and 3
        told me it was genuine, even so they issued
        me with a new product key “HEY GUESS WHAT”
        this new product key has really screwed up
        my computer.

        Since being a caring honest type of guy and
        registering my concerns I have had nothing
        but no end of trouble with me recently
        bought computer.

        What has Microsft done about it?

        Uttered their sympathies and concerns, had
        me sat at my computer for over 3.5 days
        listening to foreign engineer having to
        repeat everything as clarity of instruction
        was not perfect to say the least. Well four
        weeks on I still have to register my Windows
        with the registration team, mind you!
        somthing different happened today “I cannot
        register the new programme Microsoft sent me
        BECAUSE IT HAS BEEN REGISTERED TOO MANY
        TIMES or is this not a genuine copy sent
        direct to me from Microsoft.

        Well I have had some success after 7
        attempts I finally got through to the
        telephone registration team and after a bout
        of intense listening and a number of
        repeating the number sequence I finally got
        registered, but hey in this energy efficient
        world we live in I am not going to switch my
        computer off paying the electricity bill is
        less stressful than switching on my
        computer.

        I only want to switch on my computer and
        start work without having to re-register
        every time, JUST LIKE IT DID BEFORE
        MICROSOFT SENT FRIGHTENING POP UPS TELLING
        ME IT MAY NOT BE GENUINE.

        I can’t wait to see the response.

        by Anonymous Coward on Thursday August 10
        2006, @07:35AM (#15879608)
        BSA are con artists: they con the software
        companies to pay them to protect their
        rights (and they don't do it). I received
        letters from BSA for about 6 months in 2003:
        one letter every two weeks, asking me to buy
        legal copies of the pirated software they
        supposed I used and they were supposed
        to "protect", threatening with "2 to 5 years
        in jail" and warning me they might come any
        time to inspect my software setup.

        Fortunately for me:
        * I did not use at that time and I do not
        use now unlicenced software, nor did the
        company I worked for at that time use
        unlicenced software.
        * The law in my country would not put me in
        jail for using unlicenced software (only a
        fine).
        * BSA do not have the right to make
        inspections in my country. They can log a
        complaint and have the police come to me.

        Still, I was responsible for IT, and had to
        receive the letters, read them and explain
        to my betters what were those letters about
        every two weeks. I did not enjoy being
        threatened to be put in jail, being acused
        of stealing, and being taken for a full. The
        letters stopped arriving when I answered one
        of them, asked BSA to explain me why they
        think they have the right to do what they
        threatened to do, and had the word "lawyers"
        in that reply.

        Why are they con artists ? I was in their
        database because my company already bought
        the software they claimed to "protect". BSA
        are lazy, at least around here: they don't
        look for infringers, they just pound honest
        people with threats in order to have
        something to report to their sponsors. BSA
        does not look for the interests of their
        sponsors, only for the money they pour into
        BSA for those "awareness campaings" etc.

        Unfortunately for their sponsors,
        after my experience with BSA:
        * I don't buy or recomend to the people in
        charge to buy software from the companies
        members of BSA. There is always a good
        enough alternative, and running the risk of
        getting in the spotlight of BSA is not worth
        the trouble.
        * I still think it's lame to use "pirated"
        software, but I am kinda glad so many people
        do it, as far as the sponsors of BSA are
        concerned.
        * I run a clean shop, free as in free
        speech.

        Such is the life for poor suckers who live
        in the world of Microsoft and their
        flunkies.

        Always glad to present information about
        Microsoft, new or "old". Since they haven't
        improved over the last five or more years,
        the old information is just as relevant,
        maybe even more, than todays.
        Ole Man
  • Microsoft's Profits Are Up a Huge 79 % !!!!

    $6.48 Billion profit is nothing to sneeze at!
    Vista pre-loaded PC's and laptops were slow starters
    but are now selling at a record clip! My critics are once
    again silenced! I told the board of directors:

    "... all we have to do is to keep pushing Vista and
    eventually people would buy it regardless of all it's
    supposed problems! People are used to buying
    whatever it is that we make: smoking, drinking and
    buying MS products - hard habits to break! When they
    say, 'I can quit any time I want', that's when I know
    they are hooked!"

    The other part of the profit picture is xBox 360/Halo
    sales! We can't make the things fast enough! Even
    though people know there is a 34.5% chance that their
    xBox will be defective, they are willing to take that
    chance and we are willing to take their money!

    Who's the man baby?


    http://fakesteveballmer.blogspot.com
    ballmerstv@...
    • What's that you say?

      The Joker is wild?

      The Wall Street Real Life Monopoly players
      are being played for suckers. Don't be
      surprised if they are wild when they
      discover where their money went. If the
      Kool-Aide doesn't render them tee-totally
      blind, that is (as it probably already has
      for many of them).

      http://www.billparish.com/msftfraudfacts.html

      MICROSOFT FINANCIAL PYRAMID - Updated
      11/17/99

      "We live in extraordinary economic times
      here in the U.S. and this success could
      ignite a whole new cycle of economic
      prosperity. We must first, however, take a
      hard look at what is occurring at Microsoft.
      Microsoft is a great company with terrific
      employees. Sadly, many of these brilliant
      people have been blinded by the stock price
      and unable to see that Microsoft is also the
      key architect of the greatest financial
      pyramid scheme this century. It is not
      uncommon for participants in pyramid schemes
      to lose their emotional bearings. My close
      friends who work at Microsoft are
      particularly upset over my work and it is
      possible that even Bill Gates and Steve
      Ballmer do not realize the implications of
      their financial practices."

      http://www.infoworld.com/article/07/07/10/botnets-spam-stock-scheme_1.html

      Botnets, spam used in stock scheme
      SEC says two Texas men allegedly hijacked
      computers and cheated investors out of more
      than $4.6 million

      By Grant Gross, IDG News Service
      July 10, 2007

      http://www.vistaheads.com/forums/security-news/21367-three-hit-charges-stock-scheme.html

      Three Hit with Charges in Stock Scheme

      http://www.bpm-today.com/story.xhtml?story_id=11200AAK7VWG

      Spam King Indicted for Stock Scheme
      By Richard Koman
      January 7, 2008 8:30AM

      http://www.emsnow.com/newsarchives/archivedetails.cfm?ID=5669

      Microsoft has settled many of its private
      antitrust claims, and it cleared its most
      significant U.S. legal hurdle when a federal
      appeals court unanimously approved the
      antitrust settlement the company negotiated
      about two years ago with the Bush
      administration. It still faces a lengthy
      court battle with the European Union, where
      it is appealing an antitrust ruling against
      it. (this was written Jul 26, 2004, hey,
      this is the last year (2008) for the Bush
      Administration). Hang onto your hats, boys!
      The Joker will be wild in 2009, if he isn't
      this year!
      Ole Man
  • A suggestion

    I have a suggestion for everybody hating MS, especially "Ole Man"...

    I suggest you change you interest/job/hobby from computers to something else. You are obviously obsessed by your hatred for MS, and fantasize of a day when MS becomes obsolete. Your predictions of MS "going under" has so far not come true, [b]and they won't come true within your lifetime[/b].

    Therefore, I suggest, for the sake of your sanity and health, to stop obsessing and change to something less stressful. May I suggest stamp collecting. I hear it is making a comeback.

    Then again, without people like "Ole Man", where would the comedic relief come from...?
    Qbt
  • RE: Microsoft Q2 earnings and outlook are up, up and away

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