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Microsoft Corporation (MSFT)

- NASDAQ
  • Thu, Mar. 12, 9:17 AM
    • Intel (NASDAQ:INTC) now expects Q1 revenue of $12.5B-$13.1B, below prior guidance of $13.2B-$14.2B and a $13.7B consensus. Gross margin guidance remains at 60% (+/- 2%), with lower volumes offset by higher ASPs.
    • "All other expectations" have been withdrawn - that presumably includes full-year guidance for mid-single digit revenue growth. Guidance will be updated during Intel's April 14 Q1 report.
    • The chip giant blames the warning on "weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain." In particular, it thinks "lower than expected Windows XP* refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe," are taking a toll on sales. Server CPU division sales are "meeting expectations."
    • Other PC-exposed names are following Intel lower: Microsoft (NASDAQ:MSFT) -2.4% premarket, AMD -2.8%, Nvidia (NASDAQ:NVDA) -2.5%, HP (NYSE:HPQ) -2.3%, Seagate (NASDAQ:STX) -2.5%, Western Digital (NASDAQ:WDC) -2.7%, Micron (NASDAQ:MU) -3.6%.
    • Update (11:35AM ET): While Intel is still down over 4%, Micron and Seagate have turned positive, and HP is close to breakeven. Microsoft, Nvidia, and Western Digital have pared their losses, but remain lower.
    | 95 Comments
  • Wed, Feb. 18, 12:15 PM
    • Down AH yesterday due to the light sales guidance provided with its mixed Q4 results, Rackspace (RAX +1.4%) is now back above $50. Helping its cause: Pac Crest has upgraded to Outperform, and at least four firms have hiked their targets.
    • Pac Crest cites enterprise and OpenStack momentum as reasons for upgrading: "In the second half of 2014, Rackspace won more large enterprise contracts worth at least $100,000 per month than it had in the prior five quarters combined ... management indicated that OpenStack now makes up more than 50% of its public cloud revenue, which implies OpenStack revenue is at least 15.6% of its total revenue."
    • Cowen (target hiked to $75) now considers it likely Rackspace "will announce support for a mega cloud provider in 1H15," thereby boosting its long-term addressable market and lowering future capex needs (in exchange for sharing revenue). It adds sales guidance was in-line after adjusting for forex, and that EBITDA margin guidance was better than expected.
    • Meanwhile, new CEO Taylor Rhodes argues the cloud infrastructure (IaaS) market's price war is calming down. "Amazon Web Services (NASDAQ:AMZN) in November, for the first time, didn’t make a price cut move ... AWS is feeling like they are the reference brand leader, that they are strong versus Google (NASDAQ:GOOG), so they don’t need to do it as much. Microsoft (NASDAQ:MSFT) is cutting price, but who knows how much share they are actually taking."
    • He also reiterates Rackspace's assertion that its OpenStack/hybrid cloud offerings are differentiated in the battle for enterprise accounts. "The mainstream market has two problems: They have legacy apps that won’t go [to multi-tenant public clouds] automatically ... the second problem they have is this skills set gap ... There is a need for software and tools development."
    • Q4 results, guidance/details
    | 9 Comments
  • Mon, Jan. 26, 6:42 PM
    • Microsoft (NASDAQ:MSFT) guides (.ppt) for its reporting units to collectively have FQ3 revenue of $20.6B-$21.4B, below a $23.8B total revenue consensus. Corporate/other revenue, which totaled $314M in FQ2, isn't included in the guidance. Forex is expected to hurt revenue growth by ~4%.
    • Full-year operating expense guidance has been cut by $1B to $33.2B-$33.6B. Another $200M worth of restructuring charges are expected over the rest of FY15 (ends June '15), yielding total charges of $1.4B. FY15 tax rate guidance is at 22%-24%; the FQ2 tax rate was 25%.
    • In its earnings slides (.ppt), Microsoft states its unearned revenue balance was $21.2B at the end of FQ2, +9% Y/Y but slightly below historical seasonality due to forex and the recognition of $300M worth of prior period deferrals. The contracted but not billed balance was above $24B.
    • Office 365 consumer subs rose by 30% Q/Q to 9.2M, and first-party game revenue (boosted by the Mojang acquisition) rose 79%. Though Microsoft is in the midst of paring back its feature phone ops 39.7M non-Lumia phones were still  sold (to go with 10.5M Lumias).
    • $1.5B was spent on capex during the quarter. Capex is expected to rise Q/Q in FQ3 due to cloud investments. Excluding the Nokia deal, opex fell 8% Y/Y (+1% otherwise).
    • MSFT -4.3% AH to $44.99. FQ2 results, details.
    | 20 Comments
  • Mon, Jan. 26, 4:42 PM
    • Microsoft's (NASDAQ:MSFT) Window OEM Pro and non-Pro revenue both fell 13% Y/Y in FQ2. The Pro slowdown is blamed on slowing business PC sales, academic discounts, and  "mix returning to pre-Windows XP end of support levels." The non-Pro decline is due to unit growth coming from cheaper hardware that Microsoft is providing discounted license fees for. Commercial Windows volume license revenue rose 3%.
    • Total Commercial revenue rose 5% Y/Y in FQ2 to $13.3B, helping drive the revenue beat. Devices & Consumer revenue (lifted by the Nokia deal) rose 8% to $12.9B. Commercial reporting segments accounted for over 2/3 of FQ2 gross profit  of $16.3B.
    • Segment performance: Commercial licensing revenue -2% Y/Y to $10.7B (hurt by the cloud shift). Commercial other +46% to $2.6B (boosted by cloud growth). Device/consumer licensing -25% to $4.2B (Windows and Android royalty declines). Computing/gaming hardware -11% to $4B (Xbox One launched a year ago). Phone hardware revenue was $2.3B, above guidance of $2B-$2.2B but down from FQ1's $2.6B (feature phone decline).
    • Highlights: 1) Commercial cloud revenue (Office 365, Azure, Dynamics online) +114% Y/Y, and now on a $5.5B/year run rate 2) 10.5M Lumias and 6.6M Xboxes were sold. Surface revenue +24% to $1.1B. 3) Server products/services +9%, with double-digit SQL Server and System Center growth. 4) Search ad revenue +23%; Bing's U.S. share is at 19.7% (per comScore).
    • With Nokia boosting spending levels in spite of last year's job cuts, R&D spend rose 6% to $2.9B, and sales/marketing 7% to $4.3B. G&A, however, fell 8% to $1.1B.
    • $2.1B was spent on buybacks. Microsoft plans to complete its existing $40B buyback program (launched in Sep. 2013) by the end of 2016.
    • Microsoft is at $45.59 in AH trading. Guidance will be provided on the CC.
    • FQ2 results, PR
    | 28 Comments
  • Mon, Jan. 26, 4:12 PM
    • Microsoft (NASDAQ:MSFT): FQ2 EPS of $0.71 in-line.
    • Revenue of $26.47B (+8.0% Y/Y) beats by $140M.
    • Shares -1.6%.
    • Press Release
    | 18 Comments
  • Sun, Jan. 25, 5:35 PM
  • Oct. 23, 2014, 7:04 PM
    • Microsoft (NASDAQ:MSFT) guides on its FQ1 CC for FQ2 revenue of $25.4B-$26.5B, below a $27.9B consensus. But the company has shown quite the knack for guiding conservatively in recent quarters; FQ1 revenue ($23.2B) was soundly above the guidance provided in July ($21.2B-$22.3B).
    • The company notes Devices & Consumer Licensing revenue (-9% Y/Y in FQ1) is being affected by the loss of revenue from Nokia; Nokia revenue totaled $650M in FQ2 last year.
    • Total Windows OEM revenue fell 2% Y/Y in FQ1, as price cuts offset unit growth. "Windows Phone revenue" (driven by Android royalties) fell 46%, something attributed in part to a "higher mix of low-royalty devices;" Microsoft is in the midst of a royalty dispute with high-end Android leader Samsung.
    • 9.3M Lumia phones were sold (up slightly Y/Y), aided by strong European and low-end demand. With feature phone sales falling quickly, phone hardware revenue is expected to drop to $2B-$2.2B in FQ2 from FQ1's better-than-expected $2.6B.
    • Search ad revenue rose 23% Y/Y; Microsoft pegs Bing's U.S. search share at 19.4% (+140 bps Y/Y).
    • Full-year opex guidance is unchanged at $34.2B-$34.6B. Due to the Nokia deal, opex was up 13% Y/Y in FQ1 to $7.9B. That growth rate should drop in the coming quarters, and possibly turn negative.
    • MSFT +2.6% AH. FQ1 results, details, guidance (.ppt), CC slides (.ppt)
    | 11 Comments
  • Oct. 23, 2014, 4:30 PM
    • Microsoft's (NASDAQ:MSFT) Commercial revenue rose 10% Y/Y in FQ1 to $12.28B, nearly even with FQ4's 11% growth. Server products/services +13%; Office commercial products +5%; commercial cloud (Azure, Office 365, Dynamics cloud apps) +128%.
    • Windows Server, SQL Server, and System Center each grew by double digits, and Lync, SharePoint, and Exchange collectively saw double-digit growth. Windows volume licensing +10%.
    • Devices & Consumer revenue (boosted by the Nokia deal) +47% to $10.96B. Phone hardware revenue totaled $2.6B, down from $3.9B a year ago but above guidance of $1.9B-$2.3B. 2.4M Xboxes were sold (+102% thanks to the Xbox One launch), and Office Home/Personal subs rose by ~1.4M Q/Q to 7M+.  Surface revenue totaled $908M.
    • One soft spot: Dollar-wise, a 9% drop in D&C Licensing revenue to $4.09B more than offset a 16% increase in D&C Other revenue (inc. Web and cloud services) to $1.81B. OEM non-Pro Windows revenue fell 1%, though Windows consumer unit growth was positive.
    • Commercial Licensing made up 61% of Microsoft's gross profit, and Commercial Other (inc. cloud services) 5%. D&C Licensing accounted for 26%, and D&C Other just 2%.
    • $2.9B was spent on buybacks. The unearned revenue balance rose 11% Y/Y to $22.5B.
    • MSFT +2.8% AH. FQ1 results, PR.
    | 6 Comments
  • Oct. 23, 2014, 4:05 PM
    • Microsoft (NASDAQ:MSFT): FQ1 GAAP EPS of $0.54 beats by $0.05.
    • GAAP Revenue of $23.2B (+25.2% Y/Y) beats by $1.18B.
    • Shares +1.8%.
    • Press Release
    | 15 Comments
  • Oct. 22, 2014, 5:35 PM
  • Jul. 22, 2014, 6:58 PM
    • Microsoft (NASDAQ:MSFT) guides on its FQ4 CC for FQ1 revenue of $21.2B-$22.3B, below a $23.1B consensus. But the company has shown a habit of guiding conservatively in recent quarters.
    • Also likely playing a role: The Nokia phone unit (about to see massive job cuts) is expected to see FQ1 revenue of $1.9B-$2.3B; that's down from a year-ago level of $3.9B. 5.8M Lumia phones were sold in FQ4 during the 2 months following the closing of the Nokia deal, with low-end phones making up "a majority" of the volume; 7.4M Lumias were sold over the unit's full June quarter last year.
    • Microsoft's unearned revenue balance rose 13% Y/Y to $25.2B. Its contracted not billed balance totaled $24B (up $3B Y/Y), and total bookings rose 29% (20% exc. Nokia).
    • Other  details: 1) Office commercial revenue (inc. Office 365) grew 4%. 2) Surface revenue totaled $409M, and 1.1M Xboxes were sold. 3) The benefit to Windows business revenue that came from the end of XP support "moderated" towards the end of FQ4. 4) $1.3B was spent on capex in FQ4, and $5.5B overall in FY14. 5) "Commercial licensing" accounted for 65% of FQ4 gross profit.
    • MSFT +1.3% AH. Earnings slides (.ppt), guidance (.ppt).
    • Prior Microsoft earnings coverage
    | 9 Comments
  • Jul. 22, 2014, 4:18 PM
    • Microsoft's (NASDAQ:MSFT) Commercial revenue rose 11% Y/Y in FQ4 to $13.48B, an improvement from FQ3's 7% growth. Commercial cloud revenue +147% ($4.4B/year run rate), Windows volume licensing +11%, enterprise services +11%, SQL Server and System each up double-digits.
    • Thanks to two months of Nokia phone revenue, devices & consumer revenue rose 42% to $10B. Windows OEM revenue +3%, with Pro revenue rising 9% and non-Pro revenue falling 9%.
    • Office consumer revenue +21%, with the Office 365 home/personal sub base growing by over 1M to 5.6M+. Bing search ad revenue rose 40%, but display ad sales fell 11%.
    • The Nokia unit contributed $1.99B in revenue, but only $54M in gross profit. It took an $0.08 toll on EPS. On the other hand, the end of Microsoft's commercial agreement with Nokia provided a $382M one-time op. profit boost.
    • MSFT +0.2% AH. CC at 5:30PM, guidance will be provided.
    • FQ4 results, PR
    | 2 Comments
  • Jul. 22, 2014, 4:08 PM
    • Microsoft Corporation (NASDAQ:MSFT): FQ4 EPS of $0.55 misses by $0.06.
    • Revenue of $23.38B (+17.3% Y/Y) beats by $270M.
    • Press Release
    | 2 Comments
  • Jul. 21, 2014, 5:35 PM
  • Jun. 12, 2014, 4:26 PM
    • Citing stronger-than-expected business PC demand, Intel (INTC) now expects Q2 revenue of $13.4B-$14B, better than prior guidance of $12.5B-$13.5B and a $13B consensus.
    • Moreover, the chip giant now expects "some revenue growth" for the whole of 2014, after previously guiding for flat sales; the consensus is for 0.7% growth.
    • Full-year R&D/MG&A spending guidance has been upped by $300M to $19B-$19.4B.
    • The guidance hike follows several quarters of narrowing PC shipment declines, thanks in large part to healthy corporate demand. Windows 7 system purchases tied to Microsoft's decision to end Windows XP support have played a key role.
    • Other PC industry names are up in sympathy: MSFT +1% AH. AMD +1.4%. HPQ +0.8%. NVDA +0.7%.
    | 33 Comments
  • Apr. 24, 2014, 6:09 PM
    • 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)
    | 6 Comments
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Company Description
Microsoft Corp is engaged in designing, manufacturing, selling devices, and online advertising to a global customer audience. Its products include operating systems for computing devices, servers, phones, and other intelligent devices.
Sector: Technology
Country: United States