Thursday, July 21, 2005

Microsoft Financials: "And then?"

Another financial announcement. Once again, I imagine the financial analysts on the other side of the speakerphone channeling a scene from Dude, Where's My Car? and saying:

And then?

Liddell: "No and then!" No real break-out product announcements on the horizon, other than the ever-so-cool immediate money losing XBox 360. And just how many times can you talk about releasing Yukon and Whidbey? Maybe FY07 we'll have a new vista to stand from and show how the next Windows and next Office will save our stock. Or not.

Some interesting tidbits are in Joe Wilcox' rummaging through the data:

  • Information Worker: "While Microsoft attributes some of the income decline to spending on marketing and new hires, I remain concerned about the division."
  • Microsoft Business Solutions: "I see no signs this division will achieve profitability in the near future."
  • MSN: "whopping"

Another view over at CNN / Money regarding the stock price and investor's reaction:

As such, some analysts say investors probably shouldn't expect the stock, which has been mired in the mid-to-high $20 range for more than three years, to move significantly higher.

"The stock has probably bottomed out," said Alan Davis, an analyst with McAdams Wright Ragen. "But with no dramatic increases in earnings any time soon, the stock will probably increase in line with earnings growth."

As for MBS and it making a profit: "We expect double digit revenues growth … including double digit, 10 to 11 percent, growth for MBS for the [FY2006] year," Liddell said. "We want to see improved profitability [in MBS] but we're not likely to see that in the coming year." This is where I whack the MBS-Dead-Horse again and simply ask: come forth with a date for any segment to be profitable. Commit to it. Be accountable if you miss that date and either decide it's time to reorganize or shut-down that segment. Same for Mobile. Same for Home & Entertainment.

So in general, the reaction is "eh." No expectation for stock growth anytime soon. There's curiosity over why increased PC sales didn't result in higher client revenue. Lots of praise for "Halo 2" coming to save HED.

What do shareholders think? Are they just biting their tongue, waiting for the new Windows to be released?

And yes, Google announced today and is going down in after-hours trade. But before you get too cocky and talk about an over-valued over-inflated whacked out Google stock, do take a moment to consider the past year's stock performance:



(Sorry for the update spasm - my bad for trying to get fancy and include an image)

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