MS's 3rd Quarter results - Growth slowing.
Revenue in the third quarter grew at the slowest pace in five years. Growth will slow to a record low of about 8 percent this year, after tracking as high as 38 percent in the 1990s, while customers await next year's release of the new Windows.
[...]
Microsoft has $2.5 billion in multiyear agreements up for renewal in the quarter ending June 30 and expects its typical rate of two-thirds to three-quarters of customers to re-sign, boosting revenue, he said. Server software sales will also increase.
[...]
Third-quarter revenue from network software and Windows fell short of the company's forecasts.
Microsoft received a smaller-than-expected currency benefit, Di Valerio said. Microsoft also got a greater percentage of PC Windows sales from lower-priced versions of the program.
Sales of network software rose 12 percent to $2.45 billion, compared with the company's January forecast for an increase of 13 percent to 14 percent. The unit still underpinned sales after Ballmer invested more than $3.5 billion in the unit.
Windows for PCs rose 2.2 percent to $2.99 billion, missing a forecast of at least 4 percent. Office revenue rose 2.5 percent to $2.77 billion, in line with company predictions.
[...]
Microsoft's unearned revenue, or the balance from contracts that have been billed but not booked as revenue, dropped less than analysts had expected. The revenue fell to $7.94 billion from $7.97 billion at the end of the second quarter.
I'm not sure what that last bit means for sure, but it doesn't sound like things are going to plan. Coupled with the earlier statements, it sounds like MS is past its peak. 'twould be nice. :-)
But the tone of the report on the whole is quite bullish with optimistic statements about what MS expects to do next year. I don't see the reason for such optimism myself.
It would be nice to see more people refuse to renew their multiyear licenses in June. We'll see.
No mention of competion from Linux or Apple or Sony or Google or ..., of course.
Cheers,
Scott.
