Liveblogging Microsoft 3Q Earnings: Office-Tastic and Kinect-Able (But PC-Frown)
You’d think there would be a party in Redmond, Wash., today, as software giant Microsoft soundly beat Wall Street expectations in its third-quarter earnings released earlier today.
Microsoft said it had revenue of $16.43 billion for the quarter ended March 31, 2011, which was up 13 percent from a year ago. Net income was $5.23 billion, or 61 cents per share, a rise of 31 percent and 36 percent, respectively.
The surge was led by sales of Office, Kinect and Xbox and a stronger economy.
But there are shadows, too, as results were dragged down by weaker revenues for its flagship Windows unit.
The report comes as Microsoft’s stock continues to lag, declining 14 percent for the year.
BoomTown livedblogged the call for Wall Street analysts:
2:30 pm PT: Peter Klein, Microsoft’s CFO, who sounds super peppy, outlined the strong quarter, especially for its Office products.
He also mentioned some glitches, such as Microsoft’s still-struggling efforts to increase revenue per search (RPS) in its longtime search and online advertising partnership with Yahoo and the slower growth of the PC sector upon which the software giant’s Windows relies.
PC should stand for “possibly crappy,” but good-boy Klein did not say so.
Investor relations dude Bill Koefoed also read through the news, sounding at times like a sports announcer on a cable television network.
“Quuuuaaadrupled…,” he intoned about one part of Microsoft’s business.
This all went on for a while, since Microsoft has a lot of divisions. Servers & Tools. Online Services. Entertainment and Devices. Fashion & Cute Tops.
Okay, not that one, but a girl can dream.
It was all fun and games until Koefoed got to the Yahoo problem, which Yahoo CEO Carol Bartz had used as a cudgel in her earnings report recently.
Yes, it is a bummer. But soon it was back to the happy land of Xbox!
Klein said he was pleased with the results in a jaunty manner, which made me desperately wish Microsoft CEO Steve Ballmer led the call.
Because he’s always one obnoxious query away from a volcanic popping off.
Which is why I love those Yahoo calls and Bartz.
2:54 pm PT: That was fast–the call was quickly into questions.
The first is about COGS–cost of goods sold–and how it impacts gross margins.
Klein said the expenses were volume driven. I’d explain, but then I would fall asleep.
The next question was about stock buybacks.
That might get the stock up. Yeah, said Klein, they’ll keep doing that–not that it has helped much on the share price front.
More and more questions, about the PC market, the issues at Yahoo (let’s get that RPS up!), the Windows Phone 7 business.
I’ll be honest, I was a bit bored and started reading a riveting Business Insider interview with TechCrunch’s Michael Arrington on his myriad conflicts of interest related to his tech investing while also blogging as a news guy.
Whatever you think about him, that dude is good copy.
Wait, back to growth rates for Office!
It’s going great, said Klein (hey, maybe Arrington will invest!).
The call wraps up on news of an upcoming investor conference, being held near Disney World.
Oooh, party time!