toggle

AAPL Stock: 112.65 ( + 3.24 )

Printed from http://www.macnn.com

Windows, not Xbox drives MS earnings

updated 03:35 pm EST, Fri January 27, 2006

MS reports 2Q results

Microsoft's Windows operating system--not the company's popular Xbox--helped boost profit for the company in its second quarter, along with the successful launch of a new server product. Microsoft this week posted slightly increased--up about 5 percent--earnings of $3.46 billion on increased revenues of $11.84 billion, which were up 9 percent from last year. Meanwhile, Forbes notes that the Xbox reportedly fell slightly short of its sales target. Microsoft loses money with each Xbox, according to AP. The home and entertainment division, which sells the console, posted a $293 million loss for the Christmas quarter, a quarter in which it earned $55 million the year before largely because of the Xbox loss-leader. In contrast, Apple earlier this month reported a record profit of $565 million on on record revenues of $5.7 billion.

"Rather like movie theaters that make most of their money on extortionately priced popcorn and drinks as opposed to tickets, Ballmer apparently hopes to make back money lost by the Xbox, on software and peripheral sales."

Microsoft's MSN division also saw earnings fall from $130 million last year to $58 million in the second quarter, largely because of a take-up of broadband over narrowband, according to the report.

Following the earnings, Microsoft shares were up nearly 3 percent.




by MacNN Staff

POST TOOLS:

TAGS :

toggle

Comments

  1. macimmortal

    Joined: Dec 1969

    0

    HAHAHA

    Amazing...they report horrible news and the stock goes up. Apple reports incredible news and the stock dives. *sigh*

  1. Peter Bonte

    Joined: Dec 1969

    0

    Dell

    Wel, Apple went down when the investors found out that Apple was worth more than Dull and began cashing in on the stock. Apple stoch is a bargain now so invest and enjoy the profit the next 2 to 5 years. Apple is planning great products the next 5 years and i believe some of them will be as big as the ipod.

    Consumer electronics need to be easy to use but a lot of these products aren't that user friendly, for instance programing a VCR, record digitally from the TV and keep a large collection on the HD itself, losing preselected channels and lots more. Apple can do a lot in this area especially when adding new technology to the mix.

  1. LouZer

    Joined: Dec 1969

    0

    Re: hahhaah

    Amazing...they report horrible news and the stock goes up. Apple reports incredible news and the stock dives. *sigh*

    Maybe you're reading Apple's statements (where they said next quarter's outlook look worse then anticipated - duh, why do you think the price went down - as well as a larger then expected use of stock options, which really cuts into a company's stock value) instead of MS's. They reported a huge profit (3.46 billion, vs Apple's piddly 500 million) and huge revenue, and you expect people to sell because of one of their area lost money (the XBox, which is known to be a loss leader for MS anyway)? h***, based on that theory, you'd expect apple's stock to go down due to lackluster sales of iWork or something.

    And, BTW, MS, like Sony and Nintendo, plan on making money on the games, as much as peripherals and such, for the xBOx. That's why they sell the boxes for a loss in the first place. Geesh, you'd think everyone would know this by now. There's not many new games for the xbox 360. It'll pick up next year.

    Oh, and expecting apple's stock to keep rising because of grand products Apple is planning is kind of a risk, since no one knows what apple is planning. Its all rumor and conjecture. (h***, everyone took it as gospel that a new mac mini media center was going to be released, and everyone is still waiting for Columbus, the Mac set-top box that they didn't release in 98). And its making the assumption that as apple moves into areas they have less and less a connection to, that they'll be able to come up with products that people actually want, and do what they expect them to do. For example, except for the mac-heads who'll buy anything that Apple delivers, there's very little call out there for a "media center" device that can't take cable/satellite input - which apple hasn't had in their computers since the Beige G3s. Not everyone wants to just pay for and download content from the internet, or listen to music from itunes, or see their crappy home videos and photo collection. Oh, and they'll need to seriously upgrade their hardware to support decent audio out, more than DVI for video out (sorry, my TV doesn't have DVI input), DVD playing, and media storage.

  1. Peter Bonte

    Joined: Dec 1969

    0

    hehe

    Investing in stock is always a risk, you'd think everyone would know this by now. God Steve himself said the next 5 years are going to be exiting for Apple and i intend to keep my stock for that period of time.

    MS had only 11,5 billion revenue (Apple 5,6 billion) but made a huge profit via Windows and Office. MS is dead if one of these two pillars start to crumble.

  1. shmoolie

    Joined: Dec 1969

    0

    Apple Revenue

    Did anyone else notice that Apple's revenue last quarter was now about 1/2 of Microsoft's? I remember not too long ago when that would have elicited belly laughs from analysts if someone had predicted it.

    We are witnessing a juggernaut and everything Apple does seems to build upon itself and create more revenue opportunities. In my wildest dreams a few years ago I could not have predicted that Apple would become so successful so soon after almost going under.

    All I can say is: Thank G-d for Steve Jobs!

  1. shmoolie

    Joined: Dec 1969

    0

    Re: hahhaah

    "there's very little call out there for a "media center" device that can't take cable/satellite input - which apple hasn't had in their computers since the Beige G3s. Not everyone wants to just pay for and download content from the internet, or listen to music from itunes, or see their crappy home videos and photo collection."

    Seems like you've already got the answer. Apple HASN'T released or even spoken about any kind of media center. They know the market better than anyone right now so I believe that if Apple decides the time is right to release one it will be a well made product that consumers will crave - ala the iPod and its offspring. Until that time I wouldn't listen to all the rumors that go around.

  1. LouZer

    Joined: Dec 1969

    0

    Re: hehe

    MS had only 11,5 billion revenue (Apple 5,6 billion) but made a huge profit via Windows and Office. MS is dead if one of these two pillars start to crumble.

    Umm, Apple basically has two 'pillars' of profit, their high-margin computers and the iPod. If one of those two start to crumble, so will Apple's stock. In fact, it can be argued that the iPod, and only the iPod, is what's driving apple's fortunes now. They're riding a good wave, but you better hope you get off before the wave crumbles, or that stock you own won't be worth much.

    (Oh, right, I forgot, the iPod is an icon of the 21st century and will never falter, and APple's computers are what everyone will crave and their marketshare is only going to go up - which, of course, isn't hard, since all they've done is go down the last 6 years).

  1. Peter Bonte

    Joined: Dec 1969

    0

    proffit

    Lol, 26% on the Mac computers is high margin and the 300-400% profit MS takes on Windows and Office is normal practice then?

    Sooner or later a cheap, easy and good enough replacement will take a chunk of the market and it will hurt MS. Look at the revenue, its not that high.

  1. chadpengar

    Joined: Dec 1969

    0

    this is news?

    Does anyone expect it to be different?

  1. just a poster

    Joined: Dec 1969

    0

    Microsoft is in business

    only as long as governments allow it to continue its pattern of anti-competitive criminality, and only as long as customers are willing to trust software designed by bureaucrats.

Login Here

Not a member of the MacNN forums? Register now for free.

toggle

Network Headlines

toggle

Most Popular

MacNN Sponsor

Recent Reviews

Dell AD211 Bluetooth speaker

For all of the high-priced, over-engineered Bluetooth speakers in the electronics market, there is still room for mass-market solution ...

VisionTek 128GB USB Pocket SSD

USB flash drives dealt the death blow to both the floppy and Zip drives. While still faster than either of the old removable media, sp ...

Kodak PixPro SL10 Smart Lens Camera

Smartphone imagery still widely varies. Large Megapixel counts don't make for a good image, and the optics in some devices are lackin ...

toggle

Most Commented