If Microsoft ‘sMSFT-Q bottom line is any indication, consumers are opening up their wallets again after a long frugal period. Businesses, however are not.
The world’s biggest software maker posted strong results yesterday for its fiscal second quarter, thanks in large part to stronger PC sales and consumer migration to the company’s If Microsoft ‘sMSFT-Q bottom line is any indication, consumers are opening up their wallets again after a long frugal period. Businesses, however are not.
The world’s biggest software maker posted strong results yesterday for its fiscal second quarter, thanks in large part to stronger PC sales and consumer migration to the company’s newest operating system, Windows 7.
For the three months ending December 31, 2009, Microsoft posted income of $6.66-billion (U.S.), or 74 cents a share, up from $4.17-billion, or 47 cents a share, in the same quarter a year earlier.
Excluding deferred revenue tied to its Windows 7 launch, Microsoft reported revenue of $17.3-billion and profit of 60 cents a share, not far from the analyst consensus forecast of $17.9-billion in revenue and 59 cents a share in profit. However some analysts contend that the deferred revenue should be considered a regular part of the company’s earnings, in which case Microsoft would handily beat expectations.
Microsoft CEO Steve Ballmer shows the new HP Slate computer and e-reader during his keynote address at the 2010 International Consumer Electronics Show in Las Vegas, Nevada.
During the quarter, Microsoft says it sold 60-million Windows 7 licenses, making it the fastest-selling operating system in history.
But while consumer demand was strong, Microsoft’s business division saw sales drop 3 per cent in the quarter. Its server software division experienced a small 2 per cent sales gain during the same period.
“We reported record revenue and record profit,” said Microsoft chief financial officer Peter Klein, attributing the strong numbers to higher consumer demand.
“We have not seen a return of enterprise growth.”
Although company executives expect businesses to begin refreshing their hardware and software – thus spending money on IT – starting some time this year and continuing over the next two years, when that re-fresh cycle actually begins will likely prove of extreme importance. Microsoft is set to introduce a new version of its Office suite – a traditionally strong revenue-generator – later this year. The suite is considered part of Microsoft’s business division.
Microsoft shares dropped slightly on the earnings news, falling 51 cents. Like Google and Apple, who posted results earlier this month, Microsoft investors likely expected positive earnings news based on the ongoing rebound in technology-related and overall consumer spending.
Electronic retailer Amazon.com Inc. also provided more proof that consumer spending is picking up steam. For its fourth quarter, ending Dec. 31, the company posted $384-million in profit, or 85 cents a share, compared with $225-million, or 52 cents a share, during the same period a year earlier. The numbers easily beat analyst expectations of 72 cents a share profit, according to Thomson Reuters.
The company’s electronics sales surged during the quarter.
While Amazon executives continued to rave about the performance of the company’s electronic book-reader – the Kindle – they refused to give specific sales numbers for the device. Still, Amazon CEO Jeff Bezos said the retailer now sells six Kindle books for every 10 physical books.
“Millions of people now own Kindles,” he said. “And Kindle owners read, a lot.”
Amazon may soon have significant competition in the e-reader market, after Apple unveiled its tablet computer – the iPad – earlier this week. While the products aren’t strictly in the same class, they are expected to compete in the digital book market.
Still Amazon executives issued sales forecasts yesterday that also beat analyst expectations, indicating the company believes consumer spending will continue to grow this year.
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For the three months ending December 31, 2009, Microsoft posted income of $6.66-billion (U.S.), or 74 cents a share, up from $4.17-billion, or 47 cents a share, in the same quarter a year earlier.
Excluding deferred revenue tied to its Windows 7 launch, Microsoft reported revenue of $17.3-billion and profit of 60 cents a share, not far from the analyst consensus forecast of $17.9-billion in revenue and 59 cents a share in profit. However some analysts contend that the deferred revenue should be considered a regular part of the company’s earnings, in which case Microsoft would handily beat expectations.
Microsoft CEO Steve Ballmer shows the new HP Slate computer and e-reader during his keynote address at the 2010 International Consumer Electronics Show in Las Vegas, Nevada.
During the quarter, Microsoft says it sold 60-million Windows 7 licenses, making it the fastest-selling operating system in history.
But while consumer demand was strong, Microsoft’s business division saw sales drop 3 per cent in the quarter. Its server software division experienced a small 2 per cent sales gain during the same period.
“We reported record revenue and record profit,” said Microsoft chief financial officer Peter Klein, attributing the strong numbers to higher consumer demand.
“We have not seen a return of enterprise growth.”
Although company executives expect businesses to begin refreshing their hardware and software – thus spending money on IT – starting some time this year and continuing over the next two years, when that re-fresh cycle actually begins will likely prove of extreme importance. Microsoft is set to introduce a new version of its Office suite – a traditionally strong revenue-generator – later this year. The suite is considered part of Microsoft’s business division.
Microsoft shares dropped slightly on the earnings news, falling 51 cents. Like Google and Apple, who posted results earlier this month, Microsoft investors likely expected positive earnings news based on the ongoing rebound in technology-related and overall consumer spending.
Electronic retailer Amazon.com Inc. also provided more proof that consumer spending is picking up steam. For its fourth quarter, ending Dec. 31, the company posted $384-million in profit, or 85 cents a share, compared with $225-million, or 52 cents a share, during the same period a year earlier. The numbers easily beat analyst expectations of 72 cents a share profit, according to Thomson Reuters.
The company’s electronics sales surged during the quarter.
While Amazon executives continued to rave about the performance of the company’s electronic book-reader – the Kindle – they refused to give specific sales numbers for the device. Still, Amazon CEO Jeff Bezos said the retailer now sells six Kindle books for every 10 physical books.
“Millions of people now own Kindles,” he said. “And Kindle owners read, a lot.”
Amazon may soon have significant competition in the e-reader market, after Apple unveiled its tablet computer – the iPad – earlier this week. While the products aren’t strictly in the same class, they are expected to compete in the digital book market.
Still Amazon executives issued sales forecasts yesterday that also beat analyst expectations, indicating the company believes consumer spending will continue to grow this year.
