Earnings: Microsoft Revenue Up 27 Percent; Profit Rises 23 Percent; Online Ad Rev Up 33 Percent
Microsoft (NSDQ: MSFT) turned a profit of $4.29 billion, or $0.45 per share for the quarter ending Sept. 30, compared with $3.4 billion, or $0.35 per share in the same quarter last year. Revenues were up 27 percent to $13.76 billion in the quarter ending Sept. 30, fueled, in part, by sales of new operating system Vista.
Entertainment and devices: The home of Xbox brought in $1.93 billion in revenue, up from $1.01 billion in the same 2006 quarter. Operating income swung to black with $165 million, compared with last year’s first QFY1 loss of $142 million.
Online Services Business/Advertising: Still the smallest division, Online Services lost $264 million on revenues of $671 million. In the same quarter last year, the group lost $102 million on $536 million ijn revenue. The 25 percent growth in revenue included $80 million from aQuantive for the half-quarter since the close. Live ID signups grew 19 percent to 405 million. Advertising revenue grew 25 percent, excluding the acquisition of aQuantive, and was up 33 percent overall.
Earnings release | Slides (ppt) | Webcast | Transcript (SeekingAlpha)
Some highlights from the earnings call: One constant throughout—the kind of analyst compliments usually heard during a Google (NSDQ: GOOG) call.
—Online advertising: CFO Chris Liddell: “We’re aiming to become one of the major players in the online advertising space, and we are pleased by the progress we are making in putting the building blocks in place. ... We will continue to invest in this business, as we’ve told you before. For example, in building a differentiated search experience in the four high value verticals of commerce, local search and mapping, entertainment and health, which collectively represent 40 percent of all global searches.” AQuantive will add $500 million of revenue for the year.
—Growth: Responding to a question of organic growth versus acquired growth, Liddell said: “We’re particularly happy that we not only closed aQuantive but we’ve retained all of the employees. We think that integration has gone extremely well and we believe that’s going to generate some significant benefits going forward. We also did some other smaller acquisitions, ones which we think are important for the ad platform, like AdECN during the quarter, and then the announcement yesterday on Facebook, which is a willingness on our part to make a commitment to a multi-year agreement with a partner who we think has got some tremendous growth opportunities. ... We are willing to do both. We are quite clearly willing to suffer an operating loss in that position as a result of those commitments.”
Posted In: Entertainment, Games, Gadgets, Money, Earnings, Companies, Microsoft
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