- Monday, 23 November 2009
- INQ Mobile
- RSS
We've got a number of tools in our armoury [Not weapons? Ed.] - UK government minister
Microsoft profits are expected to decline
STROKERS OF BEARDS and people in the know think that Microsoft is going to post declines in profit and sales for its fiscal fourth quarter next week.
Wall Street analysts' estimates are that the Vole will post earnings of 36 cents per share on revenues of $14.38 billion.
The Wall Street Journal points out that this compares with earnings of 46 cents per share and $15.84 billion in revenue in the same period a year earlier.
The profits of doom, or at least decline, come in the wake of the Vole's recently revamped Internet search service, called Bling, er Bing, which was supposed to claw back some cash for Microsoft.
The problem seems to be that Microsoft makes a lot of its cash from software preloads driven by the PC hardware market, which practically went on life support last winter. Thus Vista and Office have taken quite a knock because of the recession.
True, the Vole has been doing well flogging copies of Windows XP onto netbooks, which have been selling well. XP long ago paid for its development costs and is pure Volish profit, however Microsoft charges less for XP than for Vista. µ
Share this:
ShareBusiness Intelligence Software
Customer Relationship Management (CRM)
Enterprise Accounting Software
Enterprise Resource Planning (ERP)
Enterprise Systems Management
Now that it is clear that Microsoft does not own the rights on butt clamps I also expect there profits to decline...
linq: http://www.theinquirer.net/inquirer/news/1468999/microsoft-patented-butt-clamp
The other problem is that Microsoft cannot seem to stop spending money hand-over-fist. Bing cost money to develop and is now costing billions to advertise, while many business units contiune to sell products at an outright loss. For instance, strong sales of Xbox units actually cut into profit figures, because of the loss made on each sale. Unless these are backed by strong enough sales of Microsoft-branded games, to make up for the outlay (which has never happened, yet, and will probably never happen, given how much the project has cost), then these sales will remain as a permanent loss of income.
Diluting ths stock didn't help, either. When there are actually 10 microsoft shares, for every human being on the planet, you have to wonder how much each one can be expected to pay out. What is the solution to that dilemma? Buy some shares back? Microsoft does that all the time, but then issues even more replacement shares into the market as it does so; hitting its profits (via the buy backs, which amount to billions of dollars, each quarter), while hampering its ability to issue healthy dividends in the future. Microsoft is now one of the biggest single traders in its own stock.