Feeds

Microsoft sees flat IT biz, issues SARS warning

Servers, services up

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

Although Microsoft saw income rise in the past quarter, it downplayed any expectations of growth in the PC business.

Redmond reported income of $7,835,000,000 last quarter, down on the $8,541,000.000 it reported in the previous quarter but up on the $7,245,000,000 that poured into the coffers in the corresponding quarter last year.

Microsoft announced a pre-tax profit of $4,168,000,000.

Gleaning sector performance within the company is more difficult. The information disclosed tells us earnings, but not costs from each sector.

So we learn that developer tools, training and certification income leapt 40 per cent in the past quarter. And that "Business Services" income almost doubled. The server OS showed good growth too.

But deprived of the cost of this income, we are unable to tell if each sector is making money. Or if, as last year's 10-Q showed, the desktop monopoly continues to fund a set of sickly basket-case businesses.

This is important information. In branching out into new businesses such as games consoles and mobile phones, Microsoft can expect to sustain heavy losses before turning a profit. As any business would. But is that pain turning into a gain?

We don't know. The financial statement reports that "CE/Mobility" - which encompasses the ailing phone division - saw revenues rise to $38,000,000 from $21,000,000 in the corresponding quarter last year. But what were the costs of that income? Microsoft is now, effectively, a phone manufacturer, so they cannot be insignificant. And without costs, we cannot determine margins. In the phone business, margins are the most closely watched indicator of a vendor's fortune.

No one makes investor statements more user friendly than Microsoft. It does a terrific job, presentation-wise, and other companies should take heed. But even HP's labyrinthine earning statements break down sector-by-sector performance in detail, so investors know which parts of the business are making money, and which are not.

You can try and make sense yourselves, here.

In the risks portion of the disclosure, Microsoft added the SARS virus to the long list of potential liabilities. ®

Related Story

Microsoft SEC filing shows hideous losses except for Windows

Secure remote control for conventional and virtual desktops

More from The Register

next story
Microsoft boots 1,500 dodgy apps from the Windows Store
DEVELOPERS! DEVELOPERS! DEVELOPERS! Naughty, misleading developers!
'Stop dissing Google or quit': OK, I quit, says Code Club co-founder
And now a message from our sponsors: 'STFU or else'
Apple promises to lift Curse of the Drained iPhone 5 Battery
Have you tried turning it off and...? Never mind, here's a replacement
Uber, Lyft and cutting corners: The true face of the Sharing Economy
Casual labour and tired ideas = not really web-tastic
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Linux turns 23 and Linus Torvalds celebrates as only he can
No, not with swearing, but by controlling the release cycle
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?