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Microsoft Corporation (MSFT)

- NASDAQ
  • 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
  • Apr. 24, 2014, 4:24 PM
    • Microsoft's (MSFT) Commercial revenue grew 7% Y/Y in FQ3 to $12.7B, a little below FQ2's 10% clip. Devices & Consumer revenue grew 12% to $8.3B after growing 13% in FQ2.
    • Commercial Licensing (50% of revenue, 65% of gross profit) sales +10% vs. +7%, with Windows volume licensing up 11% and and key server productivity offerings (Lync, SharePoint, Exchange) collectively growing double-digits.
    • Commercial Other +31% vs. +28%; 100% and 150% respective increases for Office 365 and Azure fueled the growth. The division is now nearly 10% of revenue, but still makes up less than 4% of gross profit (lower cloud margins).
    • D&C licensing rose 1% after falling 6% in FQ2, thanks in part to stabilizing PC sales; Windows OEM revenue rose 4%.
    • D&C hardware +41% (thanks to Xbox One sales) ahead of the Nokia deal's closing; Surface revenue totaled just $500M. D&C Other +18%; Office 365 Home added almost 1M subs, raising its total base to 4.4M.
    • Drops in sales/marketing and G&A spend led opex to fall 7% Y/Y to $7.49B. That boosted EPS, as did $1.8B in buybacks.
    • Satya Nadella hosts his first CC at 5:30PM ET, guidance will be provided.
    • MSFT +2% AH. FQ3 results, PR.
    | 7 Comments
  • Apr. 24, 2014, 4:05 PM
    • Microsoft Corporation (MSFT): FQ3 EPS of $0.68 beats by $0.05.
    • Revenue of $20.4B (-0.4% Y/Y) in-line.
    • Shares +2%.
    • Press Release
    | 2 Comments
  • Apr. 24, 2014, 12:10 AM
  • Apr. 23, 2014, 5:35 PM
  • Jan. 24, 2014, 12:32 PM
    • With equities getting routed today, Microsoft (MSFT +2.9%) has given back a chunk of the AH gains it saw following yesterday's FQ2 beat, but is still soundly outperforming.
    • By and large, the sell-side is pleased with Microsoft's enterprise strength, hardware sales, and cost controls. Credit Suisse has upped its PT to $42.50 from $40, while predicting Windows profitability and growth will improve in the next two quarters. It also expects Azure/Office 365 will generate "meaningfully higher" lifetime sales and profits than traditional licenses, in spite of near-term revenue cannibalization.
    • Jefferies is reiterating a Buy and $42 PT, and sees the "option value" on the Windows business (expected by the firm to decline 7.5%/year perpetually) rising following better-than-feared FQ2 numbers. But Goldman, which has been bearish since April, thinks FY14/FY15 estimates will keep dropping.
    • On the CC (transcript), CFO Amy Hood stated the macro environment is "a little better than [Microsoft] thought," and that enterprise Windows sales are benefiting both from Win. 7 upgrades and a shift towards more costly enterprise SKUs.
    • She also mentioned Microsoft was able to beat gross margin expectations in spite of a larger hardware mix by lowering costs in other areas, and claimed share gains in database (SQL Server) and systems management software (System Center).
    • More on Microsoft's FQ2
    | 10 Comments
  • Jan. 23, 2014, 6:24 PM
    • 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)
    | 21 Comments
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Company Description
Microsoft Corp is engaged in designing, manufacturing, selling devices, and online advertising.Its products include operating systems for computing devices, servers, phones and other devices.
Sector: Technology
Country: United States