FY08Q4: sorry, Microsoft, folks are saying your lipstick just doesn't help that pig much: Microsoft’s Annual Revenue Reaches $60 Billion Fastest annual revenue growth since 1999 fuels 32% increase in earnings per share.
Pre-announcement portion: my favorite post-analysis sites for the end-of-FY08-results:
Leaving the list is the departed MSFTExtremeMakeover, though the final post is a good read.
Most analysts are expecting a solid quarter:
- Microsoft Tests Its Might - TheStreet.com: "Analysts expect 17% year-over-year revenue growth to $15.65 billion and earnings growth of 20.5% for earnings per share of 47 cents, according to Thomson Reuters."
- Microsoft expected to post gains amid Yahoo turmoil - MarketWatch: "Sanford Bernstein analyst Charles Di Bona wrote in a note to clients Tuesday that he expects Microsoft to post a 39% gain in online services revenue to $960 million for the recently-ended quarter, though he noted a spate of recent reports showing a decline in its online search presence."
I'd expect solid numbers, too, especially with Office and SQL Server, and some shine being put on Vista numbers, especially with the departure of XP. It will be interesting to see the write-ups today, given that Google is announcing their quarterly results today, too, so some compare and contrast might arise.
With the Yahoo! foolishness going on the Online business will get extra scrutiny on the call, along with any sort of probing around the edges concerning Yahoo! plans and how it affects Live Search scale-out. Next week is the Microsoft Financial Analysts Meeting on campus, followed by a Friday morning "Word from Wall Street" meeting that I highly recommend (prediction: for at least the 3rd year running, Mr. Charles Di Bona will insist that Microsoft increases its dividend to something of significance to make up for the total lack of stock performance).
If you're in a good mood, avoid looking at the one-year chart for the MSFT stock. Yes, we did hit up in the $37 range. Yes, just a short time ago, we dead cat bounced onto $25. Mr. Ballmer insists he doesn't pay attention to the Microsoft stock price, but all this hammering on Yahoo!, and the dissatisfaction around Yahoo! stock price we're leveraging, has to come back to stick on Ballmer one of these days.
Jack Welch got the nickname Neutron Jack. Mr. Ballmer's gonna be due a financial nickname soon, whether due to his Ahab pursuit over Yahoo! or finally investors giving up on his inability to channel solid profits into a worthy stock price but rather kneecapping the stock quite often. Flatline Steve? Ballmer the Embalmer? I think I need some Wall Street wit to help out here.
Later, after the announcement...
Once again, our stock is kneecapped, this time it would appear thanks to the ongoing Yahoo! foolishness.
- Microsoft Watch - Corporate - Microsoft Q4 2008 by the Numbers by Mr. Joe Wilcox. As always, if you only read one write-up, read Joe's. Nice take on the conference call, too. Snippet, with my disgruntled bolding: "While Microsoft posted strong year-over-year growth in revenue and earnings, earnings per share came in at the low end of guidance. During a conference call this afternoon, Microsoft CFO Chris Liddell expressed disappointment about earnings per share, which he partly attributed to weak economic conditions and uncertainty about the failed Yahoo acquisition."
- Microsoft profits miss Wall Street estimates
- Microsoft’s Online Services Business posts $0.5bn loss in Q4 2008 - LiveSide - News blog by Chris over at LiveSide.net. Okay, let's not judge our losses by Xbox multiples: "...posting a $0.5bn loss in one quarter is bad, no matter how you try to paint it, and makes the need for acquiring Yahoo look all the more greater. Admittedly its still not as bad as the $1.2bn loss posted by E&D, the Xbox and Zune division, in Q4 2007 - the entire OSB loss for 2008 is only $1.3bn."
- Brier Dudley's blog Microsoft earnings tidbits Danger costs, plus MSFT's mortgage issue Seattle Times Newspaper Blog - Brier digs around some of the R&D cost ramping up in Zune land.
I wasn't too happy with the Shinola that has crept into the reading of our numbers. I like enthusiasm, but even I was a bit put-off. I also didn't like how useless most of Mr. Liddell's answers were on the conference call. Of course, folks were trying to ask oh-so-hard questions like "When will Online Services turn a profit?" Not 2009. 2010? If you were to pull the plug on MSN and Spaces tomorrow, who would notice? Or, should I say, who would not be able to find a similar (perhaps even profit-making) service to immediately start using? Inconvenient? Yes. Essential? No.