James Moody: Geek in Paradise

Official Press Release

Microsoft released it’s FY ‘07 Revenue numbers today, surpassing $50B, a 15% increase over FY06. Earnings for the closing quarter were $13.37B, a 13% increase over Q4 ‘06.

Keep in mind also, that Microsoft took a $1.15B hit to their earnings to cover repair/replacement/warranty extensions to the XBox 360, which people like to quote as having a 30% failure rate. I personally don’t believe that kind of failure rate, but it’s being thrown around, so there it is. Without that hit, revenue would have hit $14.52B for the quarter, ahead of projections released last quarter. As I predicted, they took the XBox hit this quarter since they were doing well for this quarter and still made their projected earnings. So much for people claiming Microsoft was on a downslide and wouldn’t make their earnings projection.

Great numbers for the quarter and year, and here’s to looking forward at the upcoming year with releases of Windows Server 2008, Visual Studio 2008, SQL Server 2008, Dynamics Live CRM and Office Performance Point 2007.

For posterity, here’s their projected earnings for Q1 ‘08 and FY ‘08.

Business Outlook

Microsoft management offers the following guidance for the quarter ending September 30, 2007:

•Revenue is expected to be in the range of $12.4 billion to $12.6 billion.

•Operating income is expected to be in the range of $5.0 billion to $5.2 billion.

•Diluted earnings per share are expected to be in the range of $0.38 to $0.40.

 

Management offers the following guidance for the full fiscal year ending June 30, 2008:

•Revenue is expected to be in the range of $56.8 billion to $57.8 billion.

•Operating income is expected to be in the range of $22.2 billion to $22.7 billion.

•Diluted earnings per share are expected to be in the range of $1.69 to $1.73.

Tags: Microsoft Fiscal Year Quarter Earnings XBox 360

Microsoft posted an official press release announcing the extension of previous and new XBox purchases to 3 years in light of the number of “Red Ring of Death” failures. The warranty extension will also allow for a refund to those who had to pay to get their XBox fixed in previous years. The warranty extension for previous purchases will only apply to those who experienced the “Red Ring of Death” failure, so if you were “lucky” enough to never have a failure, your warranty will not be extended unless you experience the specific failure (if I understand the statement correctly).

Any XBox 360 customer who experiences a general hardware failure indicated by three flashing red lights will now be covered by a three year warranty from date of purchase. All other existing XBox 360 warranty policies remain in place.

Microsoft will take a $1.05 to $1.15 billion hit to it’s earnings for the quarter that just ended to cover the expected costs incurred by the extension. I’d imagine earnings were good for the quarter if they’re taking the loss for that period.

Microsoft will also hold a teleconference at 2:30PDT (about 5 minutes from now) to address the announcement. If you are so inclined to listen in:

To participate, U.S. residents can dial +1-888-459-9165, and those outside the United States can dial +1-773-799-3324. The passcode is MSFT. The call will be available for playback beginning approximately one hour after the conclusion of the call through 5 p.m. PDT on Thursday, July 12, 2007. To access the playback, U.S. residents can dial +1-866-363-4143, and those outside the United States can dial +1-203-369-0210. An audio webcast of the conference call will also be made available at the Investor Relations site at http://www.microsoft.com/msft.

This is a great move by Microsoft in extending the warranty and offering reimbursements for repairs due to faulty hardware uncovered in internal testing. They are really taking care of their customer base, which should help when they release the next iteration of the XBox platform. I know I’d be more inclined to purchase a product when the company I purchased from is willing to admit to faults and take responsibility.

Tags: Microsoft XBox 360 Warranty Red Rings of Death

Major Nelson of the XBox Team made it known today that XBox.com will receive a redesign starting at 4am PST Tuesday. Plans are for no downtime at all during the swap. Be interesting to see if that goes as planned for sure.

No new features are planning to be added supposedly. Changes include:

• A new look for all of the content pages.
• Redesigned navigation
• One click access to the My Xbox section (see the examples on Flickr)
• New search function using LIVE search (this is listed as new…)
• A bunch of other little things to make it easier to use

I’ve been checking out XBox.com a bit since I picked up Shadowrun for Vista (which has turned out be a darn fun game contrary to reviews), so it’ll be interesting to see what they have in store for the site. My GamerTag is GeekInParadise (go figure) if you want to add me as a friend to get in some of the Vista related achievements (since there’s not a ton of us compared to 360′ers).

Tags: Microsoft XBox