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Microsoft Businesses The Almighty Buck

Microsoft Misses Quarterly Revenue Projection 327

Posted by Zonk from the misplaced-some-platinum-pieces dept.
monsterhead78 wrote to alert us to a BusinessWeek article discussing Microsoft's uncharacteristic miss of its own fiscal projections for the third quarter. From the article: "Three months ago, the software giant said it expected revenue for the period to come in between $9.7 billion and $9.8 billion. But when the company released results Apr. 28, it came up short. Microsoft (MSFT ) rang up just $9.62 billion in sales, a 5% increase from the year-ago quarter."
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Microsoft Misses Quarterly Revenue Projection More

Microsoft Misses Quarterly Revenue Projection

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  • they haven't released anything new, except for free patches to fix broken software...

    • a couple ideas... (Score:4, Insightful)

      by John Seminal ( 698722 ) on Friday April 29, 2005 @06:41PM (#12388585) Journal
      they haven't released anything new, except for free patches to fix broken software

      First, I think I am done buying M$, but having said that, I had an idea.

      Why does not Microsoft not release their OS, but hold it for a few months, have a large beta group of testers. Fix the bugs. Have their own in house hackers try and break in, make more fixes. Load it with lots of different kinds of software and fix whatever problems they have.

      Instead it feels like they release a product too early. Service pack 1 followed by 2 and 3 and 4.

      My second complaint is these service packs are too large for some people with dial-up. If AOL can have 100's of CD's in every computer store, why can't Microsoft have their free service patch CD's in stores??

      • Re:a couple ideas... (Score:3, Funny)

        by Anonymous Coward

        If AOL can have 100's of CD's in every computer store, why can't Microsoft have their free service patch CD's in stores??

        Because people actually want the service packs?

      • Re:a couple ideas... (Score:5, Insightful)

        by Momoru ( 837801 ) on Friday April 29, 2005 @06:55PM (#12388680) Homepage Journal
        Why does not Microsoft not release their OS, but hold it for a few months, have a large beta group of testers. Fix the bugs

        Not to be a troll, but can someone tell me specifically what bugs everyone is always talking about? Currently running Windows XP sp2 at home and work, my computers have not crashed once this year...not frozen, not blue screened, nothing. I know occasionally (maybe once a month) you'll get windows explorer crashing (where the desktop looks like its refreshing), but otherwise I don't experience any bugs? (My fedora box is performing as well btw) Please don't respond with "spyware and viruses!!!" cuz a) I havn't ever gotten any b) they are mostly user initiated.

        • Re:a couple ideas... (Score:4, Insightful)

          by black mariah ( 654971 ) on Friday April 29, 2005 @06:59PM (#12388704)
          Shhh... we can't let things like truth leak onto Slashdot.

        • Re:a couple ideas... (Score:5, Informative)

          by deranged unix nut ( 20524 ) on Friday April 29, 2005 @09:58PM (#12389800) Homepage
          Visit http://www.securityfocus.com/ [securityfocus.com] and read the ntbugtraq archives.

          There is a reason why Windows Update exists and why it is giving you dozens of updates every month.

          Put an un-patched windows 2000 or XP box on an open internet connection and you will be (silently) spreading viruses in minutes.

          When I was working at Microsoft, the corporate network was so flooded that newly installed systems were instantly infected unless we took them off of the network before we installed and patched a windows 2000 system.
      • Why does not Microsoft not release their OS, but hold it for a few months, have a large beta group of testers. Fix the bugs. Have their own in house hackers try and break in, make more fixes. Load it with lots of different kinds of software and fix whatever problems they have.

        Uhm... that's exactly what they've been doing this with Longhorn for 4 years. More so since the security push of 2003, after which every single line of code is inspected by groups within the company that specialize in security. They

      • Microsoft did release totally free XP SP 2 CDs. I'm on dial-up, and I got one. (That said, SP 1 wasn't that bad on dial-up if you're patient like me--I've downloaded a 400-some MB file before. Not pretty, but doable, so something under 100 certainly is, too.) However, with SP 2, I just decided to get the CD.

        Really, it was free--even shipping. They didn't have it in any stores that I know of, but they certainly did have it on their website.

      • Why does not Microsoft not release their OS, but hold it for a few months, have a large beta group of testers. Fix the bugs. Have their own in house hackers try and break in, make more fixes. Load it with lots of different kinds of software and fix whatever problems they have.

        How do you know they don't? There are literally tens of thousands of software packages available for Windows - how much testing do you expect them to do?

        If AOL can have 100's of CD's in every computer store, why can't Microsoft hav

    • Sarbanes-Oxley (Score:4, Insightful)

      by quarkscat ( 697644 ) on Saturday April 30, 2005 @04:05AM (#12391043)
      MSFT, Fannie-Mae, and many other public corporations are now (finally) under the onus of section 404 of the Sarbanes-Oxley Act. They can no longer "smooth out" the squiggles on their profit line charts that reflect the true nature of business -- now the corporate officers must certify both the internal financial accounting process AND the quarterly results posted with the SEC.

      Juggling the numbers to keep the shareholders numbly ignorant is now a criminal act that the corporate officers are responsible for. Accounting mechanisms for pushing/pulling income spikes and sags into another quarterly report are no longer tolerated.

      Any company with large corporate and government customers is bound to have variations in their accounts receivables, some of which will break the rising tide of their profit line charts. There (usually) isn't anything really wrong with these corporations. It's just that the accounting equivalent of cosmetic botox injections are no longer allowed. If this drives shareholders into the mentality of a longer term financial view, like 1, 3, and 5 year outlooks, it would not be a bad thing for the economy as a whole. It will, however, suck rotten eggs for all the corporate officers whose bonuses and incentives are tied to their quarterly results. I will weep giant crocodile tears for them -- NOT!

  • What! The Street loved the results (Score:5, Insightful)

    by winkydink ( 650484 ) * <sv.dude@gmail.com> on Friday April 29, 2005 @06:20PM (#12388411) Homepage Journal
    Here's an excerpt from the AP feed:
    Microsoft shares rose 85 cents, or 3.5 percent, to close at $25.30 in Friday trading on the Nasdaq Stock Market.

    The company reported its fiscal third-quarter earnings after financial markets closed on Thursday.

    For the quarter ending March 31, the Redmond, Wash.-based company earned $2.56 billion, or 23 cents per share, up from $1.32 billion, or 12 cents per share, a year ago.

    Analysts surveyed by Thomson Financial were looking for the company to post earnings of 32 cents per share on sales of $9.83 billion in the latest quarter. The company would have met earnings expectations, except for legal charges of 5 cents a share and a 4-cent-per-share charge for the expense of stock-based compensation required under new accounting rules.

    Revenue is important but profit even more so. MSFT closed up today 3.48%

  • Obviously. (Score:5, Funny)

    by Asicath ( 522428 ) on Friday April 29, 2005 @06:21PM (#12388419) Homepage
    Obviously it is because of linux!

    Finally the giant is beginning to fall!!!

    hmmm, only 9.6 billion left to go.

  • Off by $0.08 Billion? (Score:2, Interesting)

    by vraT ( 767544 )
    Seems like that isn't exactly poor performance since it's a) less than 1% below the projected sales and b) an increase from last year. I don't see the point.

    • Other companies miss by 1% and get skewered by wall street. What makes Microsoft so special? Their monopoly is actually quite fragile (only Microsoft isn't pushing an OSS operating system these days, for example).
    • Retail sales of operating systems fell. Only pre-installed OEM licensed sales grew (and that resulted in overall growth of only 2%). The question is whether retail sales lead the OEM market or not. I would think so in most cases, but with Windows the Retail tax is so onerous no one wants to pay it, so maybe not.

      Or, it could just be the money market like MS claims.

  • MS is dying! (Score:4, Funny)

    by Reaperducer ( 871695 ) on Friday April 29, 2005 @06:22PM (#12388430)
    Time to start 20 years of "Microsoft is dying" trolls.

    Just another way Microsoft is copying Apple.

    • Could be... (Score:2, Interesting)

      by John Seminal ( 698722 )
      Time to start 20 years of "Microsoft is dying" trolls.

      Just another way Microsoft is copying Apple.

      It took me a while to grasp how much money Microsoft is making. 9.6 Billion dollars. $9,620,000,000.00. I wonder how many nations have a GNP less than what microsoft does in sales??

      When Windows first came out, 3.1 was the version for me, I loved it. Before that I was stuck with DOS on my 386. Then Windows 95, I could not believe how beautiful it was, and 98, WOW all the support for multimedia and MMX

    • Re:MS is dying! (Score:5, Funny)

      by stefanlasiewski ( 63134 ) * <slashdotNO@SPAMstefanco.com> on Friday April 29, 2005 @06:38PM (#12388563) Homepage Journal
      Bah, Apple.

      Microsoft borrowed the "is dying" part from FreeBSD, just like the Windows network stack! :)

      *ducks*
    • To heck with that! When do we get to start using the word "Beleaguered"?

  • Ha! (Score:5, Funny)

    by allanc ( 25681 ) on Friday April 29, 2005 @06:24PM (#12388452) Homepage
    Your revenue increased, but slightly less than you expected it to be!

    Take *that*, evil empire!

  • haha (Score:2, Funny)

    by Anonymous Coward
    LOL, take that Microsoft! ONLY 9.62 BILLION dollars! How you like dem' apples?!?

    It sux to be them.

  • And for a different take . . . (Score:5, Interesting)

    by PIPBoy3000 ( 619296 ) on Friday April 29, 2005 @06:25PM (#12388457)
    There's also this Register [theregister.co.uk] piece, which has a different take on things.

    Interesting to me was this quote:
    Microsoft said that its home division - which includes Xbox - turned a profit for the first time, as did MSN.
    • ... even though that register story is from Jan 27th, and quotes John Conners, the now departed CFO?

  • how much more market saturation can they get? (Score:5, Insightful)

    by John Seminal ( 698722 ) on Friday April 29, 2005 @06:25PM (#12388459) Journal
    Three months ago, the software giant said it expected revenue for the period to come in between $9.7 billion and $9.8 billion. But when the company released results Apr. 28, it came up short. Microsoft (MSFT ) rang up just $9.62 billion in sales, a 5% increase from the year-ago quarter.

    So, if sales went up 5% from last year, how much higher can it go? How many more copies of windows do they need to sell? Or will Microsoft metamorpahsize into a service company? It was not that long ago I was reading that MS was going to stop selling Office, and start renting it. Only way to use it is to be on-line or something dumb like that.

  • Earnings up by 160%, revenue projection... (Score:5, Informative)

    by Osrin ( 599427 ) * on Friday April 29, 2005 @06:26PM (#12388468) Homepage
    ... missed by 0.009%. MSFT stock up by 3.48% on the day. Oh my! this is quite the story. I'm not quite sure that the lead story quite captures the essence of it though.

  • $80 million (Score:2, Insightful)

    by rookworm ( 822550 )
    while $8E7 is a lot to us mortals, they were only off by less than 1%. What is the big deal?

    • Re:$80 million (Score:2, Insightful)

      by Rude Turnip ( 49495 )
      It's not a big deal. Here's the thing. If you're the kind of person that even blinks an eye when reading news like this, then you have no business buying stocks. Go get yourself a 2% FDIC-insured savings account. In the grand scheme of things, you only make money in the stock market if you invest for the long term and keep a diversified and balanced portfolio.

  • is this really significant ? (Score:4, Insightful)

    by for_usenet ( 550217 ) on Friday April 29, 2005 @06:28PM (#12388483)

    So we're talking about an 80 million dollar miscalculation, out of 9.7 billion dollars (just over 0.8%). I know these are big numbers, but in the grand scheme of statistics, is this more than just a statistical anomoly? Or are the accounts not even supposed to be that little bit wrong ?

    I would love to see MS taken down a notch or two, but I have a hard time believing this is more than just wishful thinking on the part of some parties. If we see more than a 1% reduction in successive quarters, then I'll agree we're onto something. But till that time, I'll just keep hoping ... ;-)
  • Darn, instead of a HolyOhMyFuckingGod!!-Truckload of cash they just made a simple OhMyFuckingGod!!-Truckload this quarter

    Well sucks for them...I guess.
  • when I lose .08 billion a quarter like that
  • only 80 mil short. Bill must have at least that in between the cushions of his couch.
  • (9.8-9.62)/ 9.7 = 0.18/9.7 = .018556

    Oh wow, Microsoft's sales got overestimated by 1.8%. This _MUST_ appear in Slashdot!</sarcasm>
    • Microsoft consistently underestimates sales, to make them seem stellar when they break targets consistently. This is much bigger than the 1.8% would indicate.

      Also, MS has been known to shuffle funds around to have consistent earnings growth, to appear to be a very non-volatile investment. This would appear to be a huge reversal from that.
  • So, why didn't Bill just pull $80 million out of his wallet and slip it into the till to make it balance? He must carry at least that much in spare change! (Anybody who doesn't understand what I'm saying has obviously never worked as a cashier. ;-)

    • Re:Been there (Score:3, Interesting)

      by Grey Ninja ( 739021 )
      I've worked as a cashier, but I've most certainly never put money in the till to make the balance. Usually on my shifts, I was never off by more than a dollar, and usually under $0.20 (giving away pennies, etc). The company I worked for didn't expect a perfect balance ever. It was only when the amount was significant that any sort of investigation was done. (for example, being $10 short would warrant a review of the security tapes)
    • So, why didn't Bill just pull $80 million out of his wallet and slip it into the till to make it balance? He must carry at least that much in spare change! (Anybody who doesn't understand what I'm saying has obviously never worked as a cashier. ;-)

      I'm beginning to think you never worked as a cashier either. You'd never get the till closed with $80 million in there.

      • What? That's only 800 $100,000 bills (which were last printed in 1934 and never circulated). Are you saying Bill's wallet is bigger than your till? ;-)
  • I do so love to revel in the misery of microsoft mewahaha .
    Instead of being Alot richer than last year , they are slightly less alot richer than expected... um Mewahahaha

  • Why this is happening, IMO (Score:3, Interesting)

    by rice_burners_suck ( 243660 ) on Friday April 29, 2005 @06:40PM (#12388574)
    It's not a surprise at all that Microsoft missed their quarterly revenue projection. After all, the company is very accustomed to basically controlling the marketplace and dictating their terms upon their customers. The quarterly projections must have accounted for nearly everybody still using prior versions of Windows to be using Windows XP or Windows Server 2003. They expected tons of sales of the newest Microsoft Office. However, many sysadmins and IT departments are wary of further "upgrades" due to the problems posed by them. Many users who have Office 2000 continue to use it because newer versions, despite their glossy advertisements, really offer nothing new for this type of work. Other users, such as most employees at this company that used to use MS Office, are discovering OpenOffice.org and discovering, for various reasons, that they actually like it better. Essentially, many companies are slowly migrating away from Windows and Office, finding that other software out there is quite capable of doing the job without all the hoopla.

    In our organization, spending on software has declined almost to nothing. We no longer buy MS Office products because OpenOffice.org has eliminated the need to do so; all of our critical infrastructure runs on Linux and FreeBSD; and the desktops and workstations that run Windows continue to run the same versions of Windows that originally came on those workstations. Therefore, we use Windows 98, Me, and XP Personal, which came on several eMachines we bought for office use. And the funniest thing is that while the Linux and FreeBSD boxes continue to use the latest stable and release versions of the OS and software, the Windows boxes have not been upgraded, and there are no plans to do so. It would only be costly, and would offer us nothing in exchange. And I believe the same applies to countless organizations the world over. People will simply not continue to upgrade hardware and software forever.

    That, my friends, is why Microsoft missed its quarterly revenue projection.

  • it dont matter (Score:2, Informative)

    by micromuncher ( 171881 )
    If Microsoft were a blue chip stock, this would be important. BUT ... Microsoft is a commodity stock - so missed earnings are pretty much irrelevant - because until recently Microsoft has not paid a dividend, and investment stocks usually react differently to bunged projections (cause it means you didn't get paid.) All Microsoft has to do is announce some vapourware and the stock price goes up. Such is the nature of commodities.

  • Seriously. I can't think of a really good thing that came out of Redmond for the last quarter. They were exposed as SCO supporters [slashdot.org] and badmouthed by IBM, they paid an enormous fine to the EU [slashdot.org] for anti-trust shenanigans, they came out as bizarrely anti-consumer [slashdot.org] ("Communists!") just as Firefox started making news (cover of Wired, NYT articles, &c). Nevermind the new bouts of worms and SP2 screwups [slashdot.org] that booched a bunch of companies. Roll all this up in a delay for their next-gen OS [slashdot.org] while Apple starts KILLIN

  • Headlines (Score:5, Insightful)

    by aaarizpe ( 669365 ) on Friday April 29, 2005 @06:53PM (#12388674)
    Google News:

    Microsoft profits jump to US$ 2.56 billion this quarter (Earthtimes.org)
    Microsoft Third-Quarter Profits Double (Yahoo News)
    Microsoft: The Cash Machine (Motley Fool)

    Slashdot:

    Microsoft Misses Quarterly Revenue Projection

    It's almost as if there's some bias or something...
  • Minion: I've got good news and bad news.

    Bill Gates: OK.

    Minion: Revenues for this last quarter were 9.62 billion dollars, up 5%!

    Bill Gates: Wow! That's amazing! What's the bad news?

    Minion: Revenues were only 99.18% of projections.

    Bill Gates: OFF WITH HIS HEAD!!!!

  • Until the the late 1990s the price of MicroSoft stock doubled every two years. Then it reached a peak of arounf $60 in 2000 and has fallen by half since then.
  • They only made $2.56 billion dollars in profit this quarter! A sure sign of a company on the decline! Linux desktops for everyone by 2006!!

  • Perspective ... you zealots... (Score:5, Interesting)

    by telstar ( 236404 ) on Friday April 29, 2005 @07:06PM (#12388767)
    To put it in perspective, VA Software, the company that owns Slashdot, is trading at 1.37/share [yahoo.com] ... down from their 52-week high of 3.17. Those that live in glass houses...

  • Can the /. news filter please relax? (Score:5, Insightful)

    by timothy_m_smith ( 222047 ) on Friday April 29, 2005 @07:20PM (#12388888)
    I don't know why I even both to post this b/c I haven't posted in months, but can't this site be just tiny, itsy bit less slanted? I understand that MS is the antithesis of Open Source and that is what this site is about, but please spare me this type of story.

    No one here would give a crap about MS corporate results, but b/c they miss by a couple percent it becomes a story. Can't there be a little bit more reason? Not everything in the Windows world is terrible and every aspect of Open Source is not perfect. Maybe that is why I like Ars Technica better, b/c they are much more reasonable...
  • If you dig a little deeper on this one, you will see that the cause of the revenue miss is due to currency flucations (the dollar moved the reverse of their hedges, strengthening).

    What was important - and eye opening here - is that even with a miss on the revenue side, earnings were double what they were in the year ago quarter.

    While you can't continually grow the bottom line (earnings), with a shrinking top line, it is positive and says something good when a company has robust earnings even in the face of declining revenues.

    If you break down the revenues you find something interesting. Strong improvements in both Server products and XBox. Both of these are positives for Microsoft and are in line with their long-term directions.

    Yours,

    Jordan

  • Halving of R&D budget isn't the story? (Score:4, Interesting)

    by Jboy_24 ( 88864 ) on Friday April 29, 2005 @07:48PM (#12389101) Homepage
    So they missed their revenue proejctions by a fraction, yet they posted double the profits from last quarter by halving their R&D Budget from 3 billion to 1.5 billion. And slashdot doesn't pick up on that.

    My question, since R&D covers almost all new development in the company,
    Which products/programs where cut?

    Have they dropped their "Inovate" slogan?
  • Hey, it works for the *AA's. When they get into trouble, sue customers and purchase legislation to increase revenue.
  • ...and they made street plus server sales were up 11% over last year...

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