Microsoft Fourth Quarter Results - Mobile and Embedded Devices Achieved Profitability for the Full Fiscal Year

[Kris Kumar]

http://www.microsoft.com/msft/earnings/FY06/earn_rel_q4_06.mspx

"Microsoft Corp. today announced record fourth quarter revenue of $11.80 billion for the period ended June 30, 2006, a 16% increase over the same quarter of the prior year. Operating income for the quarter was $3.88 billion, a 30% increase compared with $2.99 billion in the prior year period. ... “We delivered a very strong finish to the fiscal year highlighted by customer demand for our recently launched products of Xbox 360™, SQL Server™ 2005, Visual Studio® 2005 and Microsoft Dynamics™ CRM 3.0, which fueled a combined 31% revenue growth of their business groups for the quarter,” said Chris Liddell, chief financial officer of Microsoft. “Our upcoming launches of Windows Vista™, the 2007 Microsoft® Office System, Exchange Server 2007, and other key products position us to continue to deliver strong revenue growth in fiscal year 2007. We are also very pleased that both the Microsoft Business Solutions and the Mobile and Embedded Devices businesses achieved profitability for the full fiscal year.” ... The company also announced that its board of directors has authorized new share repurchase programs, comprised of a $20 billion tender offer scheduled to be completed on August 17, 2006, as well as authorization for up to an additional $20 billion ongoing share repurchase program with an expiration of June 30, 2011."



The Mobile and Embedded Devices Division which is responsible for delivering Windows Mobile had a good fiscal year, not only did they end the 2006 fiscal year in black but the Windows Mobile based phone licenses grew by 90%. The other big news announced during the earnings report was the $20 billion share re-purchase plan which seems to have given the Microsoft stock some much needed boost. Fiscal year 2007 will be a big one for Microsoft, Vista and Office - the big money makers are slated for launch early next year. Also before the end of the year we might see the launch of Zune, Microsoft's answer to the iPod. And let's hope that they will launch Windows Mobile .Next as well. :wink: Getting back to the earnings report, Microsoft recently announced changes to its financial reporting structure, beginning with fiscal year 2007 Microsoft will report financial performance based on five operating segments - Client, Server and Tools, Online Services Group, Microsoft Business Division and Microsoft Entertainment and Devices Division. Mobile and Embedded Devices earnings will be bucketed under the Microsoft Entertainment and Devices Division, so I am not sure if we will see the kind of financial details that is available now in the next quarter. For those of you who find the earnings press release boring to read, check out the PowerPoint presentation over here; it will provide you with all the information in a snap.

[Kris Kumar]

http://www.microsoft.com/msft/earnings/FY06/earn_rel_q4_06.mspx

"Microsoft Corp. today announced record fourth quarter revenue of $11.80 billion for the period ended June 30, 2006, a 16% increase over the same quarter of the prior year. Operating income for the quarter was $3.88 billion, a 30% increase compared with $2.99 billion in the prior year period. ... “We delivered a very strong finish to the fiscal year highlighted by customer demand for our recently launched products of Xbox 360™, SQL Server™ 2005, Visual Studio® 2005 and Microsoft Dynamics™ CRM 3.0, which fueled a combined 31% revenue growth of their business groups for the quarter,” said Chris Liddell, chief financial officer of Microsoft. “Our upcoming launches of Windows Vista™, the 2007 Microsoft® Office System, Exchange Server 2007, and other key products position us to continue to deliver strong revenue growth in fiscal year 2007. We are also very pleased that both the Microsoft Business Solutions and the Mobile and Embedded Devices businesses achieved profitability for the full fiscal year.” ... The company also announced that its board of directors has authorized new share repurchase programs, comprised of a $20 billion tender offer scheduled to be completed on August 17, 2006, as well as authorization for up to an additional $20 billion ongoing share repurchase program with an expiration of June 30, 2011."



The Mobile and Embedded Devices Division which is responsible for delivering Windows Mobile had a good fiscal year, not only did they end the 2006 fiscal year in black but the Windows Mobile based phone licenses grew by 90%. The other big news announced during the earnings report was the $20 billion share re-purchase plan which seems to have given the Microsoft stock some much needed boost. Fiscal year 2007 will be a big one for Microsoft, Vista and Office - the big money makers are slated for launch early next year. Also before the end of the year we might see the launch of Zune, Microsoft's answer to the iPod. And let's hope that they will launch Windows Mobile .Next as well. :wink: Getting back to the earnings report, Microsoft recently announced changes to its financial reporting structure, beginning with fiscal year 2007 Microsoft will report financial performance based on five operating segments - Client, Server and Tools, Online Services Group, Microsoft Business Division and Microsoft Entertainment and Devices Division. Mobile and Embedded Devices earnings will be bucketed under the Microsoft Entertainment and Devices Division, so I am not sure if we will see the kind of financial details that is available now in the next quarter. For those of you who find the earnings press release boring to read, check out the PowerPoint presentation over here; it will provide you with all the information in a snap.

[gambit]

Stupid question: what does the graph represent? i doesn't have a title, is that sales or revenue from MED?

but yay for MED all the same - good to hear the are continuing their profitability climb.

Riki

[Mike Temporale]

Originally Posted by gambit

Stupid question: what does the graph represent? i doesn't have a title, is that sales or revenue from MED?

It looks like revenue by quarter year over year.

Originally Posted by gambit

but yay for MED all the same - good to hear the are continuing their profitability climb.

Agreed! Go MED, GO!

[Kris Kumar]

Originally Posted by gambit

Stupid question: what does the graph represent? i doesn't have a title, is that sales or revenue from MED?

Excellent question. Mike is right, it is the revenue. It came from the PowerPoint. :-)

[Kris Kumar]

The question I would like answered is: how is the Windows Mobile license sales tracked. Lets say Moto produces 150,000 Qs, does Microsoft get paid before they are produced or after the product ships to the store shelves?

[Mike Temporale]

Originally Posted by Kris Kumar

The question I would like answered is: how is the Windows Mobile license sales tracked. Lets say Moto produces 150,000 Qs, does Microsoft get paid before they are produced or after the product ships to the store shelves?

Typical Microsoft licensing is to say x number of licenses at price range 1. If you exceed x licenses then you will be billed at a rate of xx per 1,000 licenses or some such number. You buy these in advance. If, in the end, you go over or under, you would adjust your next license agreement to reflect that.

That's the typical licensing that I have seen. It could be different for WinMo.