Microsoft offers conservative revenue guidance, cuts spending forecasts

|About: Microsoft Corporation (MSFT)|By:, SA News Editor

Microsoft (MSFT) guides on its FQ2 CC for its various reporting segments to collectively post FQ3 revenue of $20B-$20.5B. That compares with a $20.47B consensus. Given two straight quarters of solid revenue beats, investors might view the guidance as conservative.

The software giant is also lowering its FY14 (ends June '14) opex guidance range to $31.2B-$31.5B from a prior $31.3B-$31.9B, and cutting its FY14 capex budget by $500M to $6B. Microsoft's original capex budget wasn't well-received when first issued.

Microsoft isn't shy about highlighting its FQ2 enterprise numbers: The company states server product sales rose 12% Y/Y, and Office Commercial and Windows volume licensing sales 10% apiece. It also estimates Hyper-V gained 5 points of virtualization share; Hyper-V has been taking share from VMware's (VMW) market-leading vSphere platform for some time.

Office consumer sales fell 24% Y/Y,; Microsoft attributes 2/3 of the drop to a shift to Office 365 Home Premium, which now has over 3.5M subs (up from 2M in October).

Microsoft's unearned revenue balance (non-GAAP) rose 12% Y/Y to $19.5B, and its contracted not billed balance rose 12% to over $23B.

MSFT +3.6% AH. FQ2 results, details, earnings slides (.ppt), guidance slides (.ppt)