All you gotta do is "find the queen".
Those who know the game know how much if it is slight of hand, making
it nearly impossible to pick correctly, often because the real card
was palmed and will only show up when the wrong card (all 3) has been
chosen.
Microsoft reported Record profits, a 32% increase in revenue, and a
Earnings per share grew 72%.
Pretty impressive - except:
These results reflect $1.67 billion of revenue and operating income,
$1.14 billion of net income and $0.12 of diluted earnings per share
that
were previously deferred primarily related to the technology guarantee
programs for Windows Vista(TM) and the 2007 Microsoft(R) Office
release.
Hey Rocky, watch me pull a rabbit out of my hat. Remember all of
those "Vista ready" machines that were sold last year, and the support
contracts? Appearantly Microsoft decided to call some portion of
those XP sales a "Technology Guarantee" - so they could report it as
Vista revenue.
Sound familiar? Microsoft did the same thing with Windows 2000 to
assure a huge "First week Unit volume". Most of the NT 4.0 licenses
sold from September 1997 to 2000 were sold to corporate customers with
an "automatic upgrade" to Windows 2000.
It looks like this time, Microsoft decided to hedge their bets again
and play funny games with the money. They decided to hold back some
portion of the revenue from Windows XP sales, so that they could
report huge volumes, and revenue, on Vista, in that first quarter.
So long as there isn't some sort of "adjustment to prior profits" - to
cover this little tap-dance, it's probably legal, but not an accurate
reflection of the real market revenue on the specific new product.
Microsoft is "delighted with the positive customer response these
products have received,"
But keep in mind that these customers are not end users. The
customers are OEMs. Those are the CUSTOMERS who actually PURCHASE
Windows licenses.
But then we get to the bad news:
Microsoft management offers the following guidance for the quarter
ending June 30, 2007:
-- Revenue is expected to be in the range of $13.1 billion to
$13.4 billion.
Big drop over this quarter. The good news is that Microsoft can still
count on minimum commitments and revenue from either/or licenses which
allows OEMs to ship either XP
or Vista - and Microsoft can declare these to be "Vista" sales. OEMs
may have a very
different view of the entire situation and may start pushing for
better terms or a more XP
based solution - or possibly even Windows 2000 for VMS.
-- Operating income is expected to be in the range of $5.0 billion
to $5.2 billion.
I guess 5.2 billion is based on the assumption that everyone who has a
license for Windows XP will pay at least $30 to upgrade to Vista, and
everybody who has a copy of Office XP or Office 2000 will pay at least
$150 to upgrade to Office 2007. And of course, all of those who have
purchased Premium support licenses will renew and pay additional
premiums for antivirus updates.
I'll be interested to see the earnings on Gateway and eMachines.
Could be interesting.
-- Diluted earnings per share are expected to be $0.37 to $0.39.
How much of that will actually be paid to Bill and Steve as tax-free
dividends?
Hurry, quick, before the democrats start taxing the again!!
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