Seeking Alpha

Microsoft guides conservatively again

  • Microsoft (MSFT) guides on its CC for FQ4 revenue of $20.4B-$21B, slightly below a $21.04B consensus. The company's FQ3 guidance proved conservative, and investors are assuming as much for its FQ4 outlook.
  • The revenue outlook for individual reporting groups: devices & consumer licensing $4.1B-$4.3B, D&C hardware $1.3B-$1.5B, D&C other $1.9B, commercial licensing $11B-$11.2B, commercial other $2.1B.
  • Xbox channel inventory drawdown is expected to impact D&C hardware, and a lower impact from Win. 7 upgrades caused by the end of XP support will affect D&C licensing. Commercial other is expected to see ~10% Q/Q growth on the back of cloud services (Office 365, Azure) demand.
  • Opex is expected to grow 4% Y/Y to $8.4B-$8.6B after adjusting for an EU fine. Capex is expected to total $1.5B (cloud investments), and unearned revenue to grow in line with seasonality. A tax rate of 18%-20% is forecast.
  • Microsoft's unearned revenue balance rose 14% Y/Y in FQ3 to $19.5B, topping guidance and exceeding FQ2's 12% clip. Bookings rose 6%, down from FQ2's 12%. The company's contracted but not billed balance closed above $22B (up over $1B Y/Y).
  • MSFT +2.7% AH. FQ3 results, details, earnings slides (.ppt), guidance (.ppt), prepared remarks (.doc)

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Comments (6)
  • Boyshigh
    , contributor
    Comments (20) | Send Message
     
    All this and still not a factor in the smart phone business. All of us MSFT investors should have great expectations. 
    24 Apr 2014, 06:18 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (861) | Send Message
     
    And the company ended the quarter with cash / equivalents and equity investments in excess of $103 billion; after backing out the debt, the company has ~$10 per share in net cash.
    24 Apr 2014, 06:45 PM Reply Like
  • dezee
    , contributor
    Comments (2426) | Send Message
     
    Look for a dividend increase coming soon in Q4'14 or Q1'15
    25 Apr 2014, 04:25 AM Reply Like
  • JD in NJ
    , contributor
    Comments (1345) | Send Message
     
    The last increase was on September 17th last year, a whopping 21.74%. I don't know if we can expect such a large amount again, but I'd expect it around the same time of the year.
    25 Apr 2014, 07:40 AM Reply Like
  • thechas7
    , contributor
    Comments (48) | Send Message
     
    $10 a share in net cash - a very deep moat!

     

    I know 3 small business owners that tossed old Windows 98 systems recently, 1 went Windows 7 and two to Windows 8 - but all 3 signed up for Office 365. Small sample size, but interesting.
    24 Apr 2014, 09:14 PM Reply Like
  • JD in NJ
    , contributor
    Comments (1345) | Send Message
     
    Microsoft has a fairly compelling product in the latest iterations of Office 365. The home version is a particularly good deal. For about a hundred bucks a year you can set up five accounts, each with their own full installation of the office suite, remote access, and online storage space. It even convinced me to spend my hard-earned money, which is quite a feat.
    25 Apr 2014, 07:43 AM Reply Like
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