Feeds

Xbox dearth takes edge off Microsoft's record quarter

Big sales everywhere else

Build a business case: developing custom apps

A shortage of components for the Xbox 360 took some of the shine off Microsoft's record second-quarter business results.

Revenue came in below Wall St expectations at $11.83bn - analysts had anticipated $11.93bn - for the period to December 31, the all-important holiday shopping season.

Microsoft sold 1.5m Xbox 360 consoles, lower than expected due to the parts shortage. The company also cut its forecast for units sold during the first 90 days to 2.5m, down from an expected three million, due to capacity constraints.

Problems meant the Xbox business lost $293m compared to a $55m profit for the same quarter the previous year. Soleil Securities analyst Jamie Friedman said. Microsoft had failed to meet even his reduced expectations and lost more money on the Xbox than he'd expected.

Despite these problems, an upbeat Microsoft promised analysts it would hit its previously promised sales targets of 4.5m to 5.5m for the full year. "We believe this is a short-term manufacturing challenge," Microsoft said.

Supply and manufacturing on the Xbox was the one black spot in an otherwise predictably glorious quarter. Microsoft announced a 5.4 per cent jump in income to $3.65bn on a 9.44 per cent jump in revenue to $11.83bn, the highest quarterly revenue in its 30 year history.

Driving revenues were server and tools and the PC client business, with strong sales in Visual Studio 2005 and Dynamics Customer Relationship Management (CRM) that were both launched during the quarter. Microsoft Business Solutions (MBS) - home of Dynamics CRM - and Mobile and Embedded hit profitability for the first time. MBS scored $10m operating income, with the mobile unit on $20m.

Separately, Microsoft refused to confirm reports that Office 12 has been formally christened Office 2007. A company spokeswoman said Microsoft had not yet picked a name. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.