MS Q3 Financials

[Zassk]

MS 3Q results are in:

http://biz.yahoo.com/prnews/080424/aqth527.html?.v=5

Entertainment and Devices Division made a profit of $89M, for a total of $614M over 9 months.

Entertainment and Devices revenue for the quarter grew 68% over the comparable period last year driven by robust demand for Xbox 360 consoles. Cumulative console sales surpassed 19 million during the quarter, up 74% from a year ago.

Recall that MS shipped very few consoles in the same quarter last year, after having stuffed the channels in the preceding holiday season.

 

[RobertR1]

http://biz.yahoo.com/prnews/080424/aqth527.html?.v=5

"Entertainment and Devices revenue for the quarter grew 68% over the comparable period last year driven by robust demand for Xbox 360 consoles. Cumulative console sales surpassed 19 million during the quarter, up 74% from a year ago. Server and Tools revenue growth of 18% added to its string of consecutive double-digit revenue growth quarters, which now stands at 23."

                                   Three Months Ended     Nine Months Ended
                                         March 31,              March 31,
                                       2008     2007          2008     2007
    Revenue
    Client                            $4,025   $5,274        $12,498  $11,167
    Server and Tools                   3,255    2,748          9,433    8,087
    Online Services Business             843      603          2,377    1,764
    Microsoft Business Division        4,745    4,827         13,668   11,768
    Entertainment and Devices Division 1,576      936          6,565    4,916
    Unallocated and other                 10       10             42       49
    Consolidated                     $14,454  $14,398        $44,583  $37,751

    Operating Income/(Loss)
    Client                            $3,097   $4,204         $9,824   $8,689
    Server and Tools                   1,092      911          3,220    2,656
    Online Services Business            (228)    (171)          (745)    (407)
    Microsoft Business Division        3,138    3,399          9,017    7,794
    Entertainment and Devices Division    89     (324)           614     (746)
    Corporate-Level Activity          (2,779)  (1,430)        (5,122)  (3,451)
    Consolidated                      $4,409   $6,589        $16,808  $14,535

Fixed -AlS

 

[Zassk]

 

[RobertR1]

I tried to space it out but didn't work out.

 

[silhouette]

The last game MS released is Mass Effect, right? So, they posted profit w/o any new game release. if that's the case, very good indeed!

 

[AlNom]

The last game MS released is Mass Effect, right? So, they posted profit w/o any new game release. if that's the case, very good indeed!

Lost Odyssey

..............

 

[AlphaWolf]

MS is really piling up the cash. Perhaps Ballmer is doing Scrooge McDuck impersonations.

 

[zed]

89million dollars profit for the 3 months. impossible to say whether or not the xbox360 is profitable yet without clarification.

The Entertainment & Devices Division is a global division comprising five main businesses: Interactive Entertainment Business, home to the Xbox® and Games for Windows® gaming platforms; Mobile Communications Business, which develops and markets Windows Mobile software, services and applications; Music Business, developers of the Zune® portable entertainment devices and services; Video Business, which includes Microsoft® TV and eHome groups; and the Specialized Devices and Applications Business, which includes PC Hardware, Microsoft® Surface, Mac Office, Microsoft® Auto, and Windows Embedded software.

 

[AlphaWolf]

89million dollars profit for the 3 months. impossible to say whether or not the xbox360 is profitable yet without clarification.

rofl, you think zune is making that money?

 

[woundingchaney]

The way Im seeing it is that Xbox 360 and games division (Live included) is the only potentially profitable division that could post this kind of profit. Is it viable to question that even the majority of this profit is stemming from somewhere else in the division??

How much can the "Specialized Devices and Applications Business" and "Mobile Communications Business" possibly account for?

 

[RobertR1]

How much can the "Specialized Devices and Applications Business" and "Mobile Communications Business" possibly account for?

89m ofcourse

seriously though, it sucks that MS bundled the Xbox divison into this E&D catch all but let's be honest, had the E&D been posting a loss, we know exactly where the blame would go to. So in that sense, the reward should go there also.

 

[zed]

umm i believe ppl have missed the

PC Hardware (mice/keyboards etc which are quite a profitable forte, just ask logitech)
Mac Office (hugely profitable)

While much of the sales were for the new Office 2007, Swenson said just over 20 percent of all boxed copies of Office were Office for Mac.

http://www.news.com/Running-the-numbers-on-Vista/2100-1016_3-6207375.html

if anyone believes these 2 items havent made $100+million for the quarter they need there head examined

WRT xb360 profits, noone here knows if they made a profit during those 3 months + until MS become more transparent we wont know

 

[Rangers]

umm i believe ppl have missed the

PC Hardware (mice/keyboards etc which are quite a profitable forte, just ask logitech)
Mac Office (hugely profitable)

http://www.news.com/Running-the-numbers-on-Vista/2100-1016_3-6207375.html

if anyone believes these 2 items havent made $100+million for the quarter they need there head examined

WRT xb360 profits, noone here knows if they made a profit during those 3 months + until MS become more transparent we wont know

And yet every other division could be posting a huge loss. Zune likely is. You think Surface R&D is really pulling in the profits? Tv and ehome is surely a money loser like the old webtv, etc.

 

[AlphaWolf]

umm i believe ppl have missed the

PC Hardware (mice/keyboards etc which are quite a profitable forte, just ask logitech)
Mac Office (hugely profitable)

http://www.news.com/Running-the-numbers-on-Vista/2100-1016_3-6207375.html

if anyone believes these 2 items havent made $100+million for the quarter they need there head examined

WRT xb360 profits, noone here knows if they made a profit during those 3 months + until MS become more transparent we wont know

You're deluding yourself. The only real things that have changed in that division in the last 12 months... xbox360... video game sales are way up.

 

[zed]

And yet every other division could be posting a huge loss. Zune likely is. You think Surface R&D is really pulling in the profits? Tv and ehome is surely a money loser like the old webtv, etc.

good to see u are in agreement, every other (including the xb360) division could be posting a huge loss. but until MS break down the numbers further its just guesswork.

but no matter how u spin it, having the mac office sales in this division is plain incredulous as it plainly belongs in Client,

if i was a journalist ild be asking why? what are they covering up?
is it zune or xbox360 or something else?
i decry for the umpteenth time the lack of decent investigator game journalism

 

[one]

PC Hardware (mice/keyboards etc which are quite a profitable forte, just ask logitech)
Mac Office (hugely profitable)

http://www.news.com/Running-the-numbers-on-Vista/2100-1016_3-6207375.html

if anyone believes these 2 items havent made $100+million for the quarter they need there head examined

I'd say this one is quite profitable:

Mobile Communications Business, which develops and markets Windows Mobile software

Windows Mobile smartphones are very popular.

 

[AlphaWolf]

Yes there's other profitable segments in E&D but they are mostly small potatoes, which has to cover up the other losers in the division such as Zune and ehome.

eg. Logitech owns a bigger share of the peripheral market, and I believe they made ~$58 million for 2007 (the whole year).

You guys can spin all you want, but there's no way in hell this division makes $89 million in a quarter without the console kicking in.

 

[Rangers]

good to see u are in agreement, every other (including the xb360) division could be posting a huge loss. but until MS break down the numbers further its just guesswork.

but no matter how u spin it, having the mac office sales in this division is plain incredulous as it plainly belongs in Client,

if i was a journalist ild be asking why? what are they covering up?
is it zune or xbox360 or something else?
i decry for the umpteenth time the lack of decent investigator game journalism

Yep that's agreeable. Bottom line is we dont know.

But if it's legal for them to break things down like this, then it's foolish to call for "investigative journalism". They can do what they want if it's legal.

Sony has a much simpler structure in that they have a gaming division. But even then you could argue something like that they're "hiding" PS3 losses behind PS2 and PSP profits. Not too mention that they shipped Cell R&D costs off to other divisions in the past.

 

[Rangers]

360 now at 19.0 million. 1.3 million shipped in 3Q. A lot more than 3Q07 of 500k, but that's already been concisely explained by another poster. But I consider a "normal" 360 non-holiday Q to be 1.5m, so it's a tad lower, but there were those shortages.

Interestingly I think it was Aron Greenburg in his recent interview said 360 was over 20 million. If that's the case they've shipped 1 million in the first three weeks of April. This is believable in that they've probably been shipping like mad to overcome that shortage, and because of GTAIV.

And Xbox 1 ended up shipping 24-25m. So 360 should surpass that by the end of 08.

 

[one]

The way Im seeing it is that Xbox 360 and games division (Live included) is the only potentially profitable division that could post this kind of profit. Is it viable to question that even the majority of this profit is stemming from somewhere else in the division??

Yes there's other profitable segments in E&D but they are mostly small potatoes, which has to cover up the other losers in the division such as Zune and ehome.

eg. Logitech owns a bigger share of the peripheral market, and I believe they made ~$58 million for 2007 (the whole year).

You guys can spin all you want, but there's no way in hell this division makes $89 million in a quarter without the console kicking in.

If Microsoft's prediction in the last year and analyst estimation are correct,
http://www.reuters.com/article/ousiv/idUSN2434172120080324

Microsoft, the world's largest software maker, has predicted its Windows Mobile license sales will reach 20 million in its fiscal year ending in June, nearly doubling its sales from a year earlier. It hasn't issued a forecast for the next fiscal year.

Analysts estimate that Microsoft generates license revenue of $8 to $15 per handset, depending on configuration.

Let's assume they sold 5 million licenses at $8 for each license. It's $40 million profit.

Also Microsoft Office 2008 for Mac was released in this quarter. I hadn't known it but it seems it's a huge business for MS.
http://www.microsoft-watch.com/content/business_applications/microsofts_big_mac_sales.html

"Twenty percent of all the versions of Microsoft Office sold at retail are the Mac version," said Chris Swenson, NPD's director of software industry analysis.

The Microsoft Business Division that sells Office earned whopping $3,138 million profit this quarter.
http://www.microsoft.com/msft/earnings/FY08/earn_rel_q3_08.mspx
Though this number is likely to come most from corporate licenses and I expect retail sales are far smaller, Mac Office is a serious contributor.