InsideMicrosoft

Microsoft Has Blowout Quarter, Stock Up Over $30 Billion

Microsoft has released its quarterly earnings report, and how good was it? The stock is up $30 billion!

Microsoft stock in after hours trading is up $3.55, which translates to $33.37 billion. Microsoft gained in the last few hours more than most companies are worth, smashing nicely above the $300 billion barrier. Microsoft stock was last $35.56 in July of 2001, a huge gain for the stock.

How good was the quarter? The facts:

• Revenue of $13.76 billion, 27% higher than the same quarter last year.
• Operating income:$5.92 billion
• Net income: $4.29 billion
• Diluted earnings per share: $0.45
• Fastest growth of any first quarter in eight years
• Cash on hand: $6.637 billion (enough to buy 1/3 of Facebook and have over a billion left over)
• Microsoft beat estimates by $1.2 billion and 6 cents, proving the doom and gloom about the software company is dead wrong.
• Microsoft has now sold 85 million copies of Vista (hardly a failure), 25 million in the last two months.
• $1.8 million copies of Halo 3 have been sold, bringing in revenue of $330 million.
• Operating margins: 43%, meaning the company is immensely profitable.

My favorite part, the revenue and profit/loss per division:

As you can see, revenue in the Entertainment and Devices division was up 90%, resulting in the first-ever profit for the division, almost entirely attributable to Halo 3 (but not entirely, so its possible, but not guaranteed, they could show a profit next quarter, too). Revenue was up over twenty percent in the Online Services division, but it lost 150% more money, due to rising costs. Revenue in the Client division, which sells Windows Vista, was up $800 million, a really good sign.

Amazing, just amazing. Microsoft really hit this one out of the park.

UPDATE: Venkat reminds me in the comments that this is, indeed, the Entertainment and Devices division’s second quarterly profit. The first? When Halo 2 came out, of course!

October 25th, 2007 Posted by Nathan Weinberg | Corporate, General | 5 comments