Dec. 4, 2014, 9:49 AM
- Along with its FQ2 results, Barnes & Noble (BKS -11.4%) has announced it's buying Microsoft's (MSFT +1.6%) stake in Nook Media for $62.4M in cash and 2.7M shares (current value of $52.8M). The companies have also "agreed to terminate their commercial agreement." (8-K)
- With Microsoft having invested $300M in Nook Media (contains B&N's Nook hardware, online bookstore, e-book, and college bookstore ops) in 2012 for a 17.6% stake, the software giant is taking a ~$185M loss on its investment.
- B&N's Nook segment revenue (covers hardware, digital content, and accessories) fell 41.3% Y/Y in FQ2 to just $62M, thanks to tough competition from Amazon and ongoing tablet cannibalization of e-readers. B&N's college segment saw revenue rise 1.9% to $751M.
- The sale follows Microsoft's July decision to lay off roughly half the workers in its Nokia phone unit, as part of a broader restructuring.
Nov. 4, 2014, 11:02 AM
- In what's a surprise move given the companies' rivalry, Microsoft (MSFT -0.1%) is partnering with cloud storage/file-syncing giant Dropbox to tightly integrate Office's PC, mobile, and cloud apps with Dropbox's service.
- Among other things, Dropbox users will be able to link their accounts with the Office iPad apps (enabling quick file-viewing, editing, and cloud saving), and the editing of files accessed via Dropbox's Web app will be handled by default through the Office Web Apps, with saved docs than being stored back on Dropbox.
- News of the tie-up comes just a week after Microsoft announced plans to give all Office 365 subs unlimited cloud storage through its OneDrive service (already tightly integrated with Office), thereby deeply undercutting Dropbox and many other rivals.
- Much like many other moves (I, II) Microsoft has made to support rival/alternative platforms since Satya Nadella became CEO, this one seems driven by pragmatism: Dropbox's base include 300M+ users (70% outside the U.S.) and 4M businesses, and its service has been used to store 35B Office docs.
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.
Oct. 23, 2014, 4:05 PM
Oct. 20, 2014, 9:19 AM
- IBM missed Q3 estimates, pulled its $20 2015 EPS forecast, and respectively reported 15% and 7% Y/Y drops in hardware revenue and services backlog.
- Big Blue also stated it "saw a marked slowdown in September in client buying behavior," and declared its numbers "also point to the unprecedented pace of change in our industry" (at least partially a reference to cloud services adoption).
- SAP missed Q3 revenue estimates (while posting in-line EPS), reported a 3% Y/Y drop in traditional software license revenue, and (citing the cloud transition) cut its full-year op. profit outlook.
- Microsoft (NASDAQ:MSFT) -0.8% premarket. H-P (NYSE:HPQ) -2% premarket. Oracle (NYSE:ORCL) -1.8%. EMC -0.8%. There's a good chance other enterprise IT names will trade lower as well.
Sep. 17, 2014, 9:02 AM
- The 10.7% boost in the quarterly payout to $0.31 per share (an annualized yield of 2.65% based on last night's close) is below expectations, says Goldman, maintaining its Sell rating and $36 price target.
- The increase, however, was roughly inline with a Bloomberg survey which estimated the dividend being lifted to $0.30.
- Among those positing a more aggressive move was Citi's Walter Pritchard, who saw a boost of maybe 25% along with targeting a payout ratio of around 70% for the fiscal year ending next June.
- MSFT -1% premarket
- Previously: Microsoft hikes dividend 11%, adds two new directors
Sep. 10, 2014, 2:38 PM
Jul. 23, 2014, 8:09 AM
- "We are becoming more constructive on Microsoft (NASDAQ:MSFT) as the company starts to provide more compelling evidence of its move to the cloud," says Pacific Crest's Brendan Barnicle, boosting the stock to Outperform with $54 price target. He notes an acceleration in the company's cloud business last quarter thanks to increased adoption of its Azure and Office 365 offerings.
- BofA's Kash Rangan throws in the towel on his Underperform rating, saying his team's concerns are apparently not so worrisome to those who invest in the stock.
- Shares +2.3% premarket
- Previously: Microsoft Corporation misses by $0.06, beats on revenue
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
Jul. 17, 2014, 9:16 AM
- Microsoft (NASDAQ:MSFT) is cutting ~14% of its 125K-strong workforce. 12.5K of the cuts will hit Nokia's phone unit, thereby reducing its size by roughly half.
- The layoffs are expected to be finished by the end of FY15 (ends June '15), and to result in a $1.1B-$1.6B charge. $750M-$800M of that total will be related to severance and other benefit costs, and $350M-$800M will be tied to asset-related charges.
- In a new employee memo, Satya Nadella says Microsoft is now moving to eliminate the first 13K positions, and will still continue to add jobs in some areas. "We will simplify the way we work to drive greater accountability, become more agile and move faster ... we plan to have fewer layers of management, both top down and sideways."
- He suggests Microsoft will streamline the Nokia phone lineup, and will "focus on breakthrough innovation" on the high-end. Certain low-end Nokia X (Android) devices will be migrated to Windows Phone.
- The move comes after last week's memo shied away from Steve Ballmer's "Devices & Services" mantra, and suggested big changes in product strategy and engineering processes were afoot.
Jul. 16, 2014, 1:00 PM
- Microsoft (MSFT +3.4%) has surged to new post-Dot.com bubble highs following Intel's Q2 results and multiple reports pointing to big layoffs in the wake of Satya Nadella's memo.
- In addition to beating Q2 estimates, Intel provided strong Q3 and full-year guidance, and respectively reported 6% and 19% Y/Y sales increases for its PC and server CPU reporting segments. On its CC, Intel noted it's seeing "clear signs" of a business PC refresh cycle, while adding consumer/emerging markets PC demand remains soft.
- Intel's cloud, HPC, and enterprise server-related sales each rose over 15% Y/Y. The upcoming launch of Intel's Grantley Xeon CPUs is expected to provide a boost to server demand, as is Microsoft's plan to end Windows Server 2003 support by July 2015. A shift in spend towards Internet companies using cheap white-label hardware (often running on Linux) remains a headwind.
- The layoff reports suggest roughly 1/5 of the Finnish workers that joined Microsoft via the Nokia deal will be cut loose. Look for details to be provided during the July 22 FQ4 CC.
Jul. 15, 2014, 10:51 AM
- As part of their longstanding alliance, Cisco (CSCO - unchanged) and Microsoft (MSFT +0.1%) have signed a new 3-year "go-to-market plan" featuring tech integration and sales/marketing partnerships for a slew of data center products.
- On Cisco's side, the products covered include its Nexus data center switches and UCS servers - two bright spots for the company. On Microsoft's site, they include Windows Server, SQL Server, System Center, and Azure.
- The deal, which comes amid Microsoft's partner conference (previous), also features a program to migrate Windows Server 2003 clients to UCS systems running Windows Server 2012 R2. Nonetheless, Microsoft and Cisco remain rivals in the unified communications software space.
- Separately, the WSJ reports Microsoft is close to buying Aorato, an Israeli developer of cybersecurity/identity-protection software, for $200M.
- Aorato's products analyze interactions with Microsoft's Active Directory (enterprise authentication/ID management) service to detect suspicious activity, and prevent unauthorized access to IT resources.
- The report follows the launch of an Azure identity/access management service in March, and comes amid a flurry of cybersecurity M&A activity.
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%.
Apr. 25, 2014, 8:27 AM
- "Beginning this summer, content from AOL brands like HuffPost Live, TechCrunch and Moviefone, as well as partner sites including ESPN, TMZ, Rachel Ray and Martha Stewart will be available on MSN and Bing Apps for Windows and Windows Phone helping both companies provide consumers with the best possible experience."
- "The AOL video library will include content from all 15 AOL On channels and its 2014 slate of original series that will be unveiled next week at the Digital Content NewFronts."
- AOL Video President Ran Harnevo: "The sheer scale of Microsoft’s (MSFT) network will help us reach a massive new audience and continue our climb.”
- AOL +1.8% premarket
- Source: Press Release
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.
Apr. 24, 2014, 4:05 PM
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