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Microsoft (MSFT): FQ1 EPS of $0.53 misses by $0.03. Revenue of $16.01B (-8% Y/Y) misses by...
Thursday, October 18, 2012, 4:12 PM ET
FQ1 EPS of $0.53
misses by $0.03
. Revenue of $16.01B (-8% Y/Y)
misses by $410M
. FY13 operating expense guidance of $30.3B-$30.9B re-affirmed. Shares
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This stock seems so cheap, it's tempting but will Win8 make it better or worse?
18 Oct 2012, 04:25 PM
MSFT has a do or die attitude lately. My guess is that their consumer penetration will be a solid 3rd place in smartphones and tablets, enough to drive the price up.
Last I checked, 16 million people are on Windows 8 daily, and their surface tablet is backordered. Positive signs of acceptance, despite the mixed press reviews.
I'm going long MSFT right before their Windows 8 launch. It will be a up and down 8 quarters, until they fully shift to their new strategy in services/devices.
18 Oct 2012, 04:34 PM
I don´t understand all those "die attitude" everywhere on the internet.
Of course Microsoft will succeed again. It has always been the same crap at all updates, and this is the first time I actually feels that I will get something new.
There is no way that Windows "people" will convert to the very expensive Apple, or anything else either.
18 Oct 2012, 06:49 PM
this is it in a nutshell, those who will switch, have already done so. Those who are still onboard will stay that way, and this includes the majority of business as well as personal home computer usage. They will gain market share in mobile with windows phone 8 and surface.
Those who have an ax to grind have been predicting the end of MS dominance since it began with windows 3.1. Every update cycle signalled the end of the world for MS,y et they are still here.
18 Oct 2012, 08:11 PM
i own msft staying with it looking forward to windows 8
18 Oct 2012, 05:41 PM
Currently no position - I only play the long side - Never the short side unless a hedge - currently no feasible long entries
18 Oct 2012, 06:01 PM
In at 25 and change, my Oct. 32 covered calls will expire worthless tomorrow. I'll wait for the hoped for up draft from Windows 8 before selling more covered calls. Hope it comes soon.
18 Oct 2012, 06:27 PM
I think this thesis is just beginning to play out:
The Business division was one of the few bright spots this quarter. But remember, it typically lags the Windows & Windows Live division by several quarters.
I bought shares to cover 2/3 of my short futures and options after-hours today, but am ready to re-short the bounce.
The next step is for Apple and Google to demolish Surface sales with their own announcement the next two weeks. Those empty Microsoft sales booths are going to look pretty silly by the end of December.
18 Oct 2012, 07:39 PM
These numbers are far worse than IBM or GOOG yet the reaction is muted. Windows 8 will be a complete disaster and the consumer PC market will be gone entirely in 5 years. Why would anyone want this?
19 Oct 2012, 12:12 AM
Because every one was expecting that msft would have a slow Q3. And I would no be so dramatic on PC market. Corporative demand will be the same or stronger, cloud, emerging markets.
Report isn't that bad and 28.80 looks like nice support
19 Oct 2012, 02:26 AM
Microsoft is completely irrelevant in the two major growth areas these days: cloud/data centre and mobile/tablets. Its share of both markets is in the low single digits. The desktop PC is the new buggy whip and demand for obsolete technology with a cheaper replacement can evaporate far faster than most people realise.
The company really has no hope in the cloud space because Windows is a poor fit there technically and its hefty licensing costs don't play well in a cutthroat market. Azure is not considered relevant and no other significant player has a Windows-based cloud. Many don't even bother to offer Windows guests and for those who do it's a miniscule share of their sales. With those handicaps, it's understandable that Microsoft are not really focusing there right now.
So that leaves mobile, and the only plausible scenario in which Microsoft remains relevant is that the Surface gets them back in the game somehow as a strong #3. Consumer demand is fickle and it's not clear to me that any of Microsoft's mobile offerings is going to be viewed as compelling. When you're as far behind as they are, it's not enough to be just competitive, and everything I've seen suggests that Surface and Windows Phone 8 are at best just competitive. Throw in the lack of app ecosystem and it's easy to imagine these going nowhere.
The next-best hope is that corporate desktop demand picks up again. I don't see those hopes being worth $28 a share. The way the market is valuing Microsoft is based on the business model of taxing consumer and corporate desktop PC purchases, which were predictable because it was simply assumed that everyone needed PCs and would replace them on a regular basis. But demand for that product is going away, the business model doesn't work in cloud, and there are established tax collectors in mobile already. Valuing Microsoft correctly requires figuring out what its future business model will be and where demand will come from. Valuations based on the old defunct business model will prove wildly inaccurate.
Currently Microsoft yields 3.2%. I would argue that it should yield 10%, like Pitney Bowes, another established near-monopoly player in a rapidly declining market with no clear path into any growing or even stable business. That would value MSFT at $9.20, reflecting the uncertainty of the company's future revenue sources and the speculative nature of the stock. Other analogues would be newspapers, which are farther along the obsolescence curve and have already seen earnings crumble; most of the newspaper companies that are left today are successfully transitioning to other types of media products or diversifying into other markets entirely. Those are the kinds of changes Microsoft will have to make to be the Washington Post and not the Rocky Mountain News. Such a large-scale upheaval and its attendant risks justify a much lower valuation than the market is currently offering.
19 Oct 2012, 09:50 AM
Load up the truck while you can. This is a Christmas gift. The Google mix up caused the problem.
A 3 percent dividend that is increasing while you wait.
Give me a break.
19 Oct 2012, 12:30 AM
I did it. MSFT 28.50 is a once in a years chance. Dont care about what apple boys have to say. They made some money on AAPL rally and that's it. Doubt they know any of the fundamentals of investing
19 Oct 2012, 05:52 PM
It never ceases to amaze me how forecasts from unknown analysts, with nothing but speculation and "insider information" founding their SWAG's, set the basis for determining the street's evaluation of a company and precipitating unfounded market swings. Differences of a penny carry billion dollar weights. Nonsense.
19 Oct 2012, 01:40 AM
The story is the actual performance by business unit as compared to the outlook provided by the company last quarter for each b/u...
19 Oct 2012, 07:00 AM
I am neither pro or anti Apple, Google or Microsoft. I have used all 3 technologies and all 3 have their pros and cons.
I thought that the Microsoft Suface tablet was a wonderful idea from Microsoft when it was announced last June. But in the last week I have been totally shocked by how expensive they are marketing it at - it is simply too expensive.
The RT version does not do what corporates need it to do and so the main area of sales will be the consumer marketplace - but users are already in love with Apple and Google products. Why would consumers buy a device that is more expensive than Google Android devices or of a similar price to the kudos-must-have Apple products?
I had every intention to buy a Surface RT pad but have now decided not to do so.
I think Microsoft has made a huge blunder in pricing here. Huge.
19 Oct 2012, 07:33 AM
Yea I was surprised at Surface pricing too. Msft is being optimistic and will look silly when they have to suck it and lower the price points. No matter how good Surface is, pricing it to compete with iPads is a terrible idea.
19 Oct 2012, 08:15 AM
This was the start of the MSFT slide. Actions speak louder then words.
19 Oct 2012, 10:52 AM
Can't say MSFT is too attractive. It's yearly dividend is less than a dollar and its yield is barely over 3%.
19 Oct 2012, 02:14 PM
How are those Treasuries yielding for ya? ;)
19 Oct 2012, 02:55 PM
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