Microsoft smashes Q4 2011 earnings estimates thanks to Xbox and Office

By Tom Warren, on 21st Jul 11 8:07 pm with 113 Comments

Microsoft stock

Microsoft announced on Thursday, a record fourth-quarter revenue of $17.37 billion for the quarter ended June 30, 2011.

Analysts were expecting Microsoft to post earnings of 58 cents per share however the software giant shot past the estimates to report earnings of 69 cents per share, an impressive increase of 35% from last year. “Throughout fiscal 2011, we delivered to market a strong lineup of products and services which translated into double-digit revenue growth, and operating margin expansion,” said Peter Klein, chief financial officer at Microsoft. “Our platform and cloud investments position us for long-term growth.”

Microsoft managed to secure $5.87 billion net income in Q4, 2011. Microsoft’s earnings come just two days after a blockbuster report from rival Apple. Apple announced on Tuesday net income of $7.31 billion, double its earnings from Q3 2010. Apple’s revenue rose to $28.6 billion for the quarter, up 82% from the previous year. Apple announced strong iPhone and iPad sales, 20.3 and 9.25 million respectively. The figures impressed analysts and investors, the company’s stock price soared to $400 per share in after hours trading on the NASDAQ on Tuesday evening.

Microsoft’s revenue is heavily invested in both Windows and Office suites which are fuelled by the PC market. Stiff competition from Apple’s iPad and a large number of new Android Tablets has seen the PC market slow recently. Despite this, Microsoft has sold over 400 million licences of Windows 7 and 100 million licences for its Office 2010 product.

Microsoft’s Entertainment & Devices Division revenue grew by a massive 30% in the fourth quarter, 45% over the year. The software giant pinned the growth squarely on the company’s Xbox and Kinect products. “A strong year of double-digit increases in revenue and earnings is a real credit to all of our Microsoft employees and partners around the world. We continue to see strong business demand across all of our products, from small businesses all the way up to the largest global enterprises,” said Kevin Turner, chief operating officer at Microsoft. “Our move to cloud services continues with the release and momentum of Office 365 and growth in Windows Azure. We’re providing our customers seamless and powerful ways to move to the cloud, and we are well positioned for the coming year.”

Microsoft is currently trading up over 2% in after-hours NASDAQ trading. Microsoft is due to hold an earnings call at 17:30 EDT, WinRumors will update this story with any items of interest.

  • Anonymous

    DAMN!!! 

    • Anonymous

      … in a Ron Simmons voice!

  • Justfortherecord

    awesome!

  • http://twitter.com/efjay01 Ef Jay

    See, when MS focuses and invests in ALL their products, not just Windows & Office and makes them great they see good returns. Need to direct the same focus they had on Kinect to WP7 and making it an outstanding OS.

  • Anonymous

    Good stuff, and I’m very happy to see entertainment division turning a handsome profit.

    • Guest

      32M?

    • Anonymous

      I’m not sure, I see 8.6 billion revenue and 1.6 billion net profit, where did you get the 32 million number?

    • Guest

      The quarter v the year (32M on 1.4B). And 1.3B on 8.9B is 14%. Not really an attractive margin compared to anything in software. If that’s MS’s plan for future growth, it’s not a good one.

  • Anonymous

    Good stuff, and I’m very happy to see entertainment division turning a handsome profit.

  • Anonymous

    It is outstanding, it needs some OEM love and a retail push.

  • http://twitter.com/alexwilks88 Alex Wilks

    With Nintendo’s Wii U looking sketchy and the Playstation band stalling a bit in the growth steaks, Microsoft has a good chance to become the premiere gaming brand. Nintendo, Sony and Apple have portables all to themselves though so Microsoft needs to succeed with WP7 and do something interesting in Win8 to make Xbox more ubiquitous.

    • http://twitter.com/alexwilks88 Alex Wilks

      Apologies for the hideous spelling mistakes o_O

    • Lex

      A growth steak does sound pretty tasty though!

  • http://twitter.com/fancyFeast133 Steve Dobs

    Despite this, stock is now dropping in after-hours trading. 

    I don’t understand it…it is automatic, no matter what MS reports or how much they beat estimates, the stock drops after the earnings report. Poor Ballmer :(.

    • Test1ngi23

      He’s actually the 46th richest man in America. So “poor” is not entirely accurate. ;)

    • Anonymous

      Yes…his net worth is around 14 billion.

    • Guest

      It used to be $28B. He should have fired himself ;-)

    • Anonymous

      I’m sure you’re on the list genius .

    • Mark

      Guidance for next year sucked.

    • http://twitter.com/fancyFeast133 Steve Dobs

      You suck.

    • Mark

      If you didn’t want the answer, why did you say you didn’t understand why the stock dropped?

    • http://twitter.com/fancyFeast133 Steve Dobs

      maybe because I suck the most of all.  I don’t know, I just thought it would sound funny.

    • Mark

      Um, okay. But that’s the likely reason if you’re looking for it.

    • https://parithon.startssl.com/ Anthony

      That would make sense if this trend wasn’t repeating itself for 2 years now.  It seems it doesn’t matter what good news Microsoft reports, their stock falls directly afterword.  It’s almost like I could make (albeit small amounts) money by selling stock the day before Microsoft has a scheduled report, because as soon as its made their stock will drop.

    • Mark

      That’s the reason this time, as it has been on many previous occasions. There have been others. And yes, you could make money about 80% of the time by simply shorting MS on the day before earnings and selling it the day or worst case week after. Buying puts would be even more lucrative and would put less capital at risk.

    • EFlop

      because window has declined 2 qtr in a row and a decline Window sales leaves MS to be just another IBM for business services.

    • https://parithon.startssl.com/ Anthony

      On the contrary… Windows 7 has been in the market now for 2 years and has been the fastest selling OS for Microsoft to date. However, the sales of finally slowed for the past 2 qtrs.  They’ll continue to slow until Windows 8 releases sometime in the next 18+ months.

    • Anonymous

      What was IBM’s revenues last year?

    • Guest

      US$ 99.870 billion (2010).

    • Anonymous

      Not bad for a “services” company.

    • Guest

      Yeah. Their move into software has also been pretty lucrative for them. Makes you wonder if MS wouldn’t be better off sticking to what it’s good at: enteprise.

    • tim.griffiths

      MS is a stock that alternates between to points. It’s not in a boom scenario like Apple so nobody expects it to go up any higher. It wouldn’t matter what profit they did or didn’t make, they could have made double and the stock would still do the same thing.

      You have to remember the shareholders won’t make there money back from the profit the company makes, it would take far to long to ever happen. They make their money from being able to sell at a higher price.

    • https://parithon.startssl.com/ Anthony

      They also get dividends from MS.

    • Brent

      “It wouldn’t matter what profit they did or didn’t make, they could have made double and the stock would still do the same thing.”

      Don’t be ridiculous. If growth reaccelerated and they increased earnings dramatically, the stock would eventually follow.

  • Anonymous

    It took a few years for Xbox to gain momentum, i hope Bing will see that growth here soon, The online services division had increasing losses so that is probably where people are hammering MS..  but if investors actually followed bing they would see that bing is still largely a growth industry..  Revenue grew ~12% since last year while  operating loss grew 5%..  its growth, but MS has to find out how to grow BING without such huge losses :)   Maybe with the new Xbox dashboard throwing 40 million more bing devices out there and the wp7 mango update bringing full bing experience to WP7 that may help

    • http://twitter.com/Tartarus116 Fred

      Unfortuantely most of their services don’t work outside the US. 

      Kinect’s speech recognition doesn’t work here in Switzerland. And the Zune Video Marketplace (which is only available on xbox here) is a huge mess, since it offers more french movies than german ones. AND I FUCKING HATE FRENCH!!!!

    • Guest

      “but MS has to find out how to grow BING without such huge losses”

      Part of the issue is they’re still seeing revenue per search below where they and Yahoo had hoped. Yahoo brought this up last quarter and MS talked about it again this one. Supposedly Yahoo’s RPS was much higher before the alliance. The implication being that both Yahoo and MS are seeing less revenue than they might if MS’s solution was at par or better with Yahoo’s previous in house system.

      Since I’m not an RPS expert, I don’t know what’s involved. It just seems odd that they can’t fix it faster given that Yahoo apparently had it sorted out better a couple of years ago.

    • Anonymous

      Danny Sullivan of search engine land covered this with Yahoos last financials.

      He called BS on Yahoo, they’re screwing up and using the Bing agreement as a scapegoat.

    • Guest

      MS themselves admitted to the issue then and again this quarter.

  • Anonymous

    It took a few years for Xbox to gain momentum, i hope Bing will see that growth here soon, The online services division had increasing losses so that is probably where people are hammering MS..  but if investors actually followed bing they would see that bing is still largely a growth industry..  Revenue grew ~12% since last year while  operating loss grew 5%..  its growth, but MS has to find out how to grow BING without such huge losses :)   Maybe with the new Xbox dashboard throwing 40 million more bing devices out there and the wp7 mango update bringing full bing experience to WP7 that may help

  • Anonymous

    Hmm if Microsoft announces losses – then the stock would go up … since the logic seems to be in reverse when it comes to their stock.  Another awesome quarter the M$

    • Justhefacts

      Unlikely. But if it did it would be because investors would see losses as equaling goodbye Ballmer.

      Look, MS is out of favor with investors and has been for a long time. Some of it deserved, I have to admit. But with EPS of $2.69 and expected growth under 10%, it’s really where it should be at around $27. If anything, it’s a little high.

      If MS wants to see its stock price go up, it needs to change its strategy in order to kickstart growth, and/or pay out a larger dividend. And the latter isn’t guaranteed to work, as we’ve seen.

    • https://parithon.startssl.com/ Anthony

      MS already pays one of the highest dividends in the
      marketplace so that isn’t going to work and what is wrong with their strategy?
      They made record (business history) profits this qtr. and in a struggling
      market to boot, so I’m at a loss with where the current strategy is failing.
      Looks like Mr. Ballmer is doing exactly what any CEO should be doing, making
      the business profitable.

    • Justthefacts

      No, it doesn’t. Among top dividend payers in the market, MS’s payout is middling. And I already said increasing it isn’t guranteed to increase the stock price.

      What’s wrong with the strategy? Do you have a free hour? How’s MS’s growth rate? How’s its positioning in mobile and tablets, two markets it helped pioneer? Where’s MS’s iPad response? How’s search doing after more than half a decade of effort and $8 billion in losses? Who is now making more profit from gaming, MS or Apple?

    • Guest

      Microsoft’s net profit: $5.87 billion Apple’s profits: $7.31 billion so the question is how much more there would have been if better execution, stronger vision, greater innovation was implemented.   

    • Guest

      xactly right.

    • MSfan

      Yes, MS is producing profits and those profits keeps Ballmer employed as CEO while other competitors like Google and Apple out innovate them in very meaningful and highly profitable ways that should have been, could have been, would have been if a more creative, less risk adverse CEO was running MS.  

    • Anonymous

      Buying Skype, Windows 8 and Windows Phone 7 are very risky ventures for Microsoft. What more do you want? Ballmer will never be Jobs.

    • Guest

      W8 and WP7 shouldn’t have been. But he blew tablets and mobile so now they are. Skype is definitely risky and unlikely to return the money spent. I agree with you that Ballmer isn’t risk averse. He’s taken plenty of risks. The problem is that almost all haven’t paid off.

    • BMG

      “Ballmer will never be Jobs” TRUE SO VERY TRUE :(

    • jfields5557

      “Ballmer will never be Jobs.”
      Perhaps that is a good thing.  I’d hate to see the CEO of Microsoft doing press conferences in a black turtleneck and jeans while proclaiming to the world that this new product “changes everything.”

  • Anonymous

    Glad to seem Microsoft doing well.   Too many people say that time and technology have pass Microsoft by. I wonder what Google’s earnings will be…

  • Anonymous

    Glad to seem Microsoft doing well.   Too many people say that time and technology have pass Microsoft by. I wonder what Google’s earnings will be…

    • Guest

      Google already reported. They knocked it out of the park.

  • Anonymous

    This is NOTHING! Wait until Nokia AND Samsung drops their beauties with WP7/8… Balmer  is gonna be swimming like Scrooge Mc Duck in a swimming pool…. no, a LAKE full of $. Keep up the great work, fellas.

    Can’t wait for the Nokia WP7 and Samsung too.

    • Guest

      Very true indeed. Looking forward to that moment.

    • Anonymous

      It’s not a lake – it’s an ocean!

  • Aaron

    Can’t wait to see what they report this time next year.  Office 365, Nokia phones, Skype/Bing/Kinect integration across products, PC market revitalization from ultrabooks, and hopefully W8 tablets.  2012 will be one amazing year!  I just hope MS remembers that integration of products and services is the key.  They have the building blocks, they just need to piece them together to make something great.

    • Guest

      If you’re right, then MS was sandbagging on the conference call. I’m sure there was some of that going on. But you’re a lot more optimistic than they were.

  • http://vasilydernis.tumblr.com/ Vasily Dernis

    entertainment is where its at and its where it can compete with winmo7 i think…

    • Anonymous

      You mean Windows Phone 7, Windows phone has a very innovative UI and growing feature set but Microsoft may be planning to take WP7 in a unique direction and one that will differentiate it even more than it’s competitors.

    • EtJay

      “to take WP7 in a unique direction and one that will differentiate it even more than it’s competitors”

      I thought its sales were already differentiating it from competitors?

    • Joey50

      It can be argued that entertainment is beginning to show signs of problems, a little research will illustrate there is concern that the counsel market is about to deteriorate with games going web based and portable. 

  • Guest

    Tom, wished you had used this link for msft – 
    http://www.bing.com/finance/search?q=MSFT&FORM=DTPFSA&qpvt=msft

    Regards

    • http://www.winrumors.com Tom W

      Oh just for you…;)

    • Guest

      Cool ;)

      thanks !!

  • yeahyeah

    It’s nothing compare to Apple.

    • Timiteh

      Perhaps but Microsoft doesn’t benefit from the massive bias that Apple benefits and Microsoft currently does care about its partners and its shareholders thus is much selfish than Apple. 

    • Guest

      If MS cared about its shareholders, it would fire Ballmer and get somebody to replace him who could actually drive growth and win against Apple.

    • Timiteh

      There are significant things you don’t understand, aren’t they ?
      Microsoft is far much more interesting for shareholders than Apple will ever be.
      And you know why ?
      Because Shareholders get dividends from Microsoft so they should not care about the stock value but about profits.
      This is why it is not interesting for Microsoft to get rid of Ballmer because he does his best to maximize profits and it is the only thing which should matter for shareholders. Ballmer is perhaps not a visionnary like Gates but he sures seems to be a better manager. He is a poor showman and VRP but under him Microsoft is taking very risky and courageous bets and for that only he deserves respect. If some bets such as Windows 8 and the use of Metro for almost all Microsoft U.I are successful, Microsoft has the potential to exponantialy increase its revenues and profits in the coming years.
      Now Microsoft should really find a better VRP.

    • Guest

      Total return = stock rtn + dividends.

      $1 invested in MS 11 years ago when Ballmer became CEO is worth .46 today. About .10 or so has been paid out in dividends. So a net of .56 (not counting taxes).

      The same $1 invested in Apple is now worth nearly $1400.

      Apple is growing at nearly eight times the rate of MS, generates more cash now, and is adding to it faster. It’s also better positioned in mobile and tablets, two of the most important segments for the future. So no, MS isn’t more interesting to investors.

    • Thrice681

      This is so deceptive, 11 years ago was the tech boom and every tech company was overvalued, except apple which was on the verge of collapsing and without direction, stop acting like a childish fanboy.

    • Guest

      I used 11 years because it spans Ballmer’s time as CEO. It wasn’t intended to be deceptive. But you’re right, Apple was near death then. So if you want to use a different time frame, like this year, the past two, three, five, whatever, do. They’ll all show the same thing: putting your money in Apple was much better than having it in MS.

      And if you don’t like any of those either, then look forward. Relative to growth, Apple is actually cheaper than MS on a PE basis. So there’s little reason to think its stock won’t continue top perform better than MS’s for some time.

      I’m not a fanboy. That’s reality. Sorry.

    • Guest

      I used 11 years because it spans Ballmer’s time as CEO. It wasn’t intended to be deceptive. But you’re right, Apple was near death then. So if you want to use a different time frame, like this year, the past two, three, five, whatever, do. They’ll all show the same thing: putting your money in Apple was much better than having it in MS.

      And if you don’t like any of those either, then look forward. Relative to growth, Apple is actually cheaper than MS on a PE basis. So there’s little reason to think its stock won’t continue top perform better than MS’s for some time.

      I’m not a fanboy. That’s reality. Sorry.

    • Surra

      Nice, I guess you quieted the fanboy with the facts, not an easy task!!!!!!!!!!

    • Timiteh

      How did again Apple shareholders really benefit from the success and the profits of this company ?
      Because for me having to sell one’s share to earn money while the company one’s owns share make record profits is just silly. It means that you must keep Apple shares as long as you can and manage to sell them once you guess that it is the right time. This is also mean that you can wait for this right time for decades.
      At least with M.S, shareholders get paid on a regular basis and can keep earning money as long as this company is profitable. No need to have a crystal ball to find out when you can expect to get the best Return On Investissment.

    • Guest

      How do most investors benefit from stocks? They sell. Your argument is nonsensical.

    • Timiteh

      How did again Apple shareholders really benefit from the success and the profits of this company ?
      Because for me having to sell one’s share to earn money while the company one’s owns share make record profits is just silly. It means that you must keep Apple shares as long as you can and manage to sell them once you guess that it is the right time. This is also mean that you can wait for this right time for decades.
      At least with M.S, shareholders get paid on a regular basis and can keep earning money as long as this company is profitable. No need to have a crystal ball to find out when you can expect to get the best Return On Investissment.

    • Anonymous

      I’m happy that Apple is profitable, but even Jobs himself has said that while a good stock price is great, he didn’t put to much importance in that.

      Profitability, revenue, debt to income is more relevant to the long term health of a company.

      You only have a handful of companies that are in that category.

    • Guest

      “Profitability, revenue, debt to income is more relevant to the long term health of a company.”

      All of which are now in Apple’s favor.

    • Anonymous

      Yes…that’s what I was implying by a handful of companies .

      Microsoft
      Google
      Apple
      Oracle

      Any others?

    • Guest

      IBM.

      Now look at that list. I’d say MS’s future growth is the least assured.

    • Guest

      He may have said that, but he knows it isn’t true. This is the same guy who repriced options and then let a couple subordinates take the rap. But it’s true that he sees the market potential first and the impact on the stock second.

    • Anonymous

      I’m happy that Apple is profitable, but even Jobs himself has said that while a good stock price is great, he didn’t put to much importance in that.

      Profitability, revenue, debt to income is more relevant to the long term health of a company.

      You only have a handful of companies that are in that category.

    • http://www.facebook.com/profile.php?id=100000678662470 Vincent Haakmat

      Like I’ve said in a previous post, show me 1 person that could replace Ballmer to head this $100 Billion dollar company, and i might agree. Until such time, it is his enthusiasm for the product that keeps Microsoft focus on their cash cows. Apple only has iPhone and iPad, but I don’t hear people complaining, while Microsoft has more than 10 successful products and people still complain. Guess what, it is what it is, deal with it. Enterprise is not as sexy or hip as the consumer space, but without them, the consumer space wouldn’t exist. So I am happy with Ballmer doing what he’s doing. It’s a tough economic neighborhood, but he proved that he could still make a profit and beat all the pundits out there.

    • Guest

      What $100B company? You must be thinking of Apple. MS is a $70B company. In terms of who could replace Ballmer, lots of people. In fact, add to his long list of failures that he hasn’t groomed any obvious replacement despite having been in the role for more than a decade. I’d probably lean towards someone like Maritz at VMware. Deeply technical. Very smart. Understands where the industry is going. Very strategic (where Ballmer is anything but). And of course is ex MS, so wouldn’t need a bunch of time to get up to speed. There are others in tech. If you want to really shake things up, make Benniof CEO and move HQ from Redmond to Silicon Valley. A daily reminder of Apple’s success might be good. Sitting up in Redmond they can still pretend they’re the big guy on the block, even though they no longer are. And of course nobody in tech knew of Gerstner before he was elected CEO of IBM and turned them around. So there are all sorts of non-tech CEOs who might work.

      His enthusiasm I’ll grant you. But focus on the cash cows? If they were fully focused on the cash cows, Longhorn and Vista should never have happened. MS wouldn’t have lost the tablet market to Apple. VMware wouldn’t have become the leader in virtualization. Amazon wouldn’t have led with cloud infrastructure. Ballmer has been anything but focused. He’s been chasing iPod, and Google, and any other company who has generated public interest. And how can you excuse his massively underestimating both iPhone and now iPad?

      People are complaining because MS has outspent Apple ten to one on R&D, yet Apple is now bigger and growing at 80% to MS’s 13. And because their stock is up 1300% since Ballmer took office, while MS’s is down 50%.

    • http://profiles.google.com/carlosrfonseca Carlos Ribeiro da Fonseca

      Until 2006 it was Bill Gates that was at the helm of the technical part so the Vista fiasco is mostly on him. Also on him is the complete mismanagement of Windows Mobile. In fact, if you look at it, Bill Gates was pretty often asleep at the helm: the Internet revolution passed him by, the mobile revolution passed him by, the cloud revolution passed him by, and so on and so on.

      Since Steve Ballmer really took the helm, we’ve seen Kinect, Office 2010, Office 365, Azure and, last but not least, Windows Phone. And while Windows Phone is still far from being a sucess, at least it has put Microsoft in the race.

      So, maybe not a complete idiot. :)

    • http://profiles.google.com/carlosrfonseca Carlos Ribeiro da Fonseca

      Oh. That’s not to say that Bill Gates isn’t a shrewd businessman, he definitely is. Just the wrong kind for Microsoft.

    • Guest

      Agree with that too.

    • Timiteh

      Not forgetting Windows 7 which still sells like hotcakes.

    • Guest

      Actuarially Windows sales have dropped the last quarter. 

    • Guest

      I agree with you on Gates negative impact. Of course, Ballmer was meant to be CEO. So he should have acted like it instead of letting his buddy run roughshod over the place. His duty was to the company, its employees and its owners. Not Bill.

      But your Ballmer retrospective seems to have left a few things out. Like promising that Vista would be great, Zune would succeed, Google could be caught within a year, nobody would buy a $500 iPhone, iPad doesn’t make sense, etc. We also seen huge losses in search and redundant, money losing projects that weren’t cut until the recession forced his hand.

      He’s certainly not a complete idiot. But he’s no match for Jobs, which has become blindingly obvious. And it’s not clear how MS, or any other large player in tech today, can flourish if they can’t compete against the new 800 pound gorilla: Apple.

    • Guest

      Bach mismanaged mobile, not Gates.

    • https://parithon.startssl.com/ Anthony

      Obviously you have no idea what you’re talking about…

      The “…actually drive growth” comment is ill-informed for example. MS captured 35% more revenue this year, and last I checked that is some HUGE growth.

    • Anonymous

      Apple is to be congratulated on their incredible success, but they are in a Market that is very sensitive to economic growth and recession, now they haven’t felt it yet and may not.

      But if we were to have a full on economic collapse, they are fully exposed to it, they make all their revenue in the consumer market and don’t have any real enterprise business revenue to fall back on.

      Companies like Microsoft and to and to a much lesser extent Google are either in the enterprise where a lot of the income is more or less contractual and you can for the most part predict your income.

    • Guest

      Yet during the 2008 recession, when companies like MS reported negative growth, Apple had a record year. Underestimating people’s willingness to buy gadgets, even in tough times, and the loyalty of Apple’s customers, is dangerous.

      Apple’s biggest exposure is iPhone. It’s now 50% of their business. If that should fall out of favor before they can replace that revenue with iPad, they would be in trouble. But that’s not looking likely. Apple has given themselves a great shot at continued high growth. Mac can take a lot more share. iPad can take even more (like 4-6x). iPhone, even though it has lost its lead to Android, still has lots of growth as feature phones switch to smartphones and market like China open up for them.  

      MS needs more leverage if its ever to grow quickly again. And if it can win in any of these ancillary consumer-focused businesses, it should go back on concentrate on the enterprise, where it actually does quite well. Especially as even IBM is starting to come on strong there again and presents a potential risk.

    • Anonymous

      The 2008 recession is nothing compared to what may lie ahead, Apples growth has been phenomenal and there’s no underestimating the consumers need to distract themselves with more
      Shiny objects, Apples retail stores are the main reason for the success of it’s product range.

      I do have a unibody MacBook pro and iPad 2 and had an iPhone 4 until I replaced it with a Windows phone, I don’t consider myself a hardcore Mac fan since I don’t plan on purchasing another Mac book pro and will most likely replace the iPad 2 with a Windows 8 tablet of some form.

      Apple is the present day Sony of the consumer electronics world.

    • Guest

      We’ll see. Right now they look pretty invincible while MS looks very vulnerable.

    • JoeBlow

      “will most likely replace the iPad 2 with a Windows 8 tablet of some form”

      Ignorance of that statement is amazing.   Why would say that when you have no idea if an Window 8 tablet is going to be any good?   It just prove your not logic based in your thought process and makes what ever comment irrelevant at best.  

    • Guest

      35% more revenue? Try 13%.

  • Anonymous

    Incredible! Microsoft’s margin of net-income vs revenue is 34% compared to Apple’s 25%. That shows you that even with nothing really happening for MSFT at the moment they are a far more profitable company. Also I expect Q1 2012 to be the same. Q2 2012 is going to be blockbuster with WP7.

  • Anonymous

    MS is killing Apple soon
    Win 8 on tablets would beat iPad, and Playbok, touchpad and army of honeycombs/ice cream sandwich would finsih the ipad off
    iPhone ? Android is beating them and WP7 is estimated to beat them, with Mango and new devices WP7 would be better
    only iPod would be king ?

    • https://parithon.startssl.com/ Anthony

      I think you mean iTunes… thats a fascist market :0

  • Anonymous

    OMG . DEAR MS I LOVE U :)

  • Gsrid1968

    Good numbers from Microsoft again-I am always amused at the “Fire Ballmer” talk-if 15% annual growth is not good enough,I wonder what will satisfy the investors? If every company in this country grew at the same rate-we would be well out of this recession a long time ago!The MS vs Apple comparisons will always be there but each comapny has its own vision for the future and have to stick to it and follow through.The Apple ecosystem is easier to define in terms of revenue but the MS/Windows  are not as easy to quantify as MS is only part of the story and one does not include all the hardware providers who benefit from the association with MS (HP/Dell/IBM/Intel etc). I read somewhere that globally the Windows ecosystem is valued at about $700 billion. In any case, I feel that the best days of MS are still ahead with the complete integration of all services across the board.I am happy I picked up the stock recently when it was at $23. BTW,I own an iMac,Macbook,iphone and ipod.  

    • Guest

      Reasonable. We need to see more level headed analysis here.

    • Anonymous

      Very well said, it’s human nature to pit one company against the other though in reality they are different companies with different Buisness models, Microsoft considers itself a platform and services company while Apple has alway been a hardware company with the software really there to support sales of the hardware.

      As to complete integration of all services…yes I think that’s an interesting subject with this kind of thing taking a bigger spot in Microsofts future, I’m hoping Microsoft will reveal more about this at BUILD in September .

    • Mark

      MS is going to have to reveal a lot in September. Not just to developers, but also to analysts and shareholders. It looks like another year of performance below the market for the stock. I think that’s three in a row.  Multiple quarters of Windows declines – the longest spell ever. The WP7 launch hasn’t been very successful. Online now up to almost $9B in losses. Ballmer has a lot of explaining to do.

    • AndyD

      Which is exactly the point MS and Ballmer should have not spent so many resources on trying to compete with companies like google and apple for focus on their core competencies and what they are good at.  As one great CEO said “Focus is a out saying no”  Knowing what opportunities to walk away from to give you the resources on the ones you can excel at is the difference between good and great. This is what Ballmer lacks.  

    • Beaslier

      The fire Ballmer statements is driven by how little value he has added in his tenure.  If your happy with the profits great, by as an investor I rather hove seen the profit levels that would have been if money poor in to poorly executed and late to the market ventures like online services/search, smart phone OS development, media players, and most recently tablets.   

      MS 15% is good but thought most of that would have happen if a slightly smarter monkey was in charge, more importantly Apple’s performance proves it could be, should be so much more.    

  • https://parithon.startssl.com/ Anthony

    You got it… future…  However, MS will be hitting the market hard when Windows 8 retails… and with their 3 screen strategy it blows the competitors away. With the vision Microsoft has already laid out, I’d argue that Apple is not in a better position for tablets or their mobile market (Android is already eating that up).

  • https://parithon.startssl.com/ Anthony

    You got it… future…  However, MS will be hitting the market hard when Windows 8 retails… and with their 3 screen strategy it blows the competitors away. With the vision Microsoft has already laid out, I’d argue that Apple is not in a better position for tablets or their mobile market (Android is already eating that up).

  • jfields5557

    I have no experience in the stock market, but it seems to me that the reason so many of these other companies (Apple specifically) are gaining value and stock prices keep rising is because they seek out relatively unclaimed or aging markets and toss something shiny in to attract consumers.  Apple did it with the smartphone market, which was filled with RIM, Palm, and Windows Mobile devices at the time.  Then Google and smartphone developers jumped in before the water could settle by trying to create competitive Android smartphones.  Microsoft’s refresh jumped in late, and with significantly less impact than iOS or Android, and so WP7 has not done as well.  It was the same with the tablet market.  Tablets were around, but Apple jumped in the the iPad and caught the eye of consumers.  All the Windows tablets and Android tablets that have been created to compete have either been mediocre or complete failures.  The problem I’m seeing is that Microsoft keeps trying to keep up, rather than push ahead.  Windows 7 has been a fantastic success for Microsoft because it was new enough to make people want to switch, but familiar enough that such a switch was easy.  Maybe I’m incorrect, I don’t know.  It’s just my personal opinion based on observations.