Microsoft announced a 1st quarter 27% growth in revenue and 23% growth in net income. The Entertainment and Device Division revenue grew 91% thanks to Halo 3 and the XBox 360. The stock rose 11% in after hours trading. There was no mention of how Windows Mobile did.
In the second quarter, they are looking for a flat to -8% growth over last year's record revenue of $2.97 Billion. I guess the new Zune lineup will not help the bottom line!
From Microsoft Investor relations PowerPoint found here.
More insight can found on the SeattlePI Microsoft blog.
You always have to be careful with these reports. Microsoft has a history of being especially devious with its financial announcements and often it takes a week or two for people to figure out what's really going on behind the scenes.
For example, at first glance I note the widely hilighted 91% Y/Y number. The important thing to keep in mind is that Q1 2007 had a dip in sales for the division after they flooded the channel in Q4 2006. In fact, a large part of this growth probably indicates ongoing recovery from that event.
I'm not saying the company didn't do well. I'm just saying that the company often wins praise over numbers born of questionable accounting.
Posted by: Chris Carlin | October 26, 2007 at 11:18 AM
Chris,
I agree, your statement is validated by the flat to -8% forecast for the 2nd quarter.
Posted by: Stephen Skarlatos | October 26, 2007 at 11:22 AM