Microsoft Reports $22.6 Billion In Q4 2016 Revenue, $965 Million From Surface

Megalith

Megalith

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Microsoft’s latest earnings have just been released, and they did better than expected. The graphs would suggest that the company’s future probably lies with cloud services, which grew 7 percent to $6.7 billion.

Analysts had expected Microsoft to earn $22.14 billion in revenue and earnings per share of $0.58. In short, the company beat expectations. The company’s stock was down 1.61 percent in regular trading, but up some 3 percent in after-hours trading (expected, given the results). Microsoft said it returned $6.4 billion to shareholders in the form of share repurchases and dividends during the quarter. “This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations,” Microsoft CEO Satya Nadella said in a statement. “The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.”
 
Returning 6.4 billion dollars to shareholders via share buybacks and dividends doesn't help keep your company competitive when you are trying to transform yourself. All it does is artificially inflate your EPS and stock price, to the maximum benefit of management who are paid primarily in Stock options. When I see companies doing gigantic stock buybacks that tells me they have no idea what to do with their money. Big red flag for me.
 
Chaos Machine said:
Returning 6.4 billion dollars to shareholders via share buybacks and dividends doesn't help keep your company competitive when you are trying to transform yourself. All it does is artificially inflate your EPS and stock price, to the maximum benefit of management who are paid primarily in Stock options. When I see companies doing gigantic stock buybacks that tells me they have no idea what to do with their money. Big red flag for me.
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When you're sitting on like $110 billion in cash and equivalents I guess it is a little hard to know what to do with it. Stock buybacks are as common as air, sure it's gimmicky but I've never heard it being much of a trouble sign, in and of itself. Not for a company that has never had material loss and only two quarterly losses in 30 years as a public company.

Overall they look to be in pretty good shape. Yeah, the phone business is pretty much dead but they're not going to leave it anytime soon altogether, not much reason to since Windows 10 has baked so much mobile into it. The Azure is exploding. Office 365 is slowing but that's been nothing short of a hit. Windows licensing saw an jump, a big jump with non-Pro versions which I certainly don't understand if PC sales are down.
 
heatlesssun said:
Windows licensing saw an jump, a big jump with non-Pro versions which I certainly don't understand if PC sales are down.
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I don't understand PC sales. I'm assuming it doesn't include home built systems. Would a stick PC be consider one too?
 
The Office 365 / Azure thing is a real pain for companies now , its no longer waiting for true-ups and even then its not very accurate , if you dont have a license you cant use the services.
anyway we just bought another bulk of 300 Office 365 E3 licenses for our users , that is around 700$ per user for 3 years.
 
At some point, when almost everything runs off Windows, they need to be regulated like a utility/monopoly.
 
Rustynuts said:
At some point, when almost everything runs off Windows, they need to be regulated like a utility/monopoly.
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Well that really isn't true anymore. Microsoft has just a small presence in the mobile client space which are today's PC. Linux is more widely used on servers. So really the only part of the computing world Microsoft dominates is the PC which isn't the bulk of computing devices anymore.
 
krotch said:
I don't understand PC sales. I'm assuming it doesn't include home built systems. Would a stick PC be consider one too?
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I don't think Windows costs anything on stick computers. But I think it includes sale to consumer, they specifically said non-Pro licensing revenue which would be consumers and OEMs.
 
Sounds like good news to me. Layoffs are no fun for anyone so hopefully MS can continue to be a solid company.
 
T_A said:
The Office 365 / Azure thing is a real pain for companies now , its no longer waiting for true-ups and even then its not very accurate , if you don't have a license you cant use the services.
anyway we just bought another bulk of 300 Office 365 E3 licenses for our users , that is around 700$ per user for 3 years.
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Are you referring to how they handle billing? If so, it's definitely a little weird. Other than that, for SMBs it's a godsend.
 
ppilot said:
Are you referring to how they handle billing? If so, it's definitely a little weird. Other than that, for SMBs it's a godsend.
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Yeah for us the only problem has been their terrible billing cycles. They need to straighten that out. Other than that we have loved Office 365.
 
heatlesssun said:
Windows licensing saw an jump, a big jump with non-Pro versions which I certainly don't understand if PC sales are down.
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Wouldn't that be because of their automatic win10 installs that most consumers don't know how to stop?
 
heatlesssun said:
How would a free update translate into increase licensing revenue?
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Not revenue, just licensing. Of course, they get to sell all the data that those machines collect, so that's where the profit comes from.

I only created my first win 10 machine yesterday, and was amazed at how many ways they collect information on the average user. Took a while to turn everything I could find, off, but I bet that they will magically restore themselves to 'on' at some point with some hidden code when a so called 'critical update' package comes out. Meantime, I disabled updates.
 
nightfly said:
Not revenue, just licensing. Of course, they get to sell all the data that those machines collect, so that's where the profit comes from.
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No, the reported number was from DIRECT sales of licenses. And there's nothing to indicate that Microsoft is selling any information they collect. They explicitly say they do not sell the information. The basic anonymous telemetry would be worth buying anyway.

nightfly said:
I only created my first win 10 machine yesterday, and was amazed at how many ways they collect information on the average user. Took a while to turn everything I could find, off, but I bet that they will magically restore themselves to 'on' at some point with some hidden code when a so called 'critical update' package comes out. Meantime, I disabled updates.
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There have been cases where all the settings weren't being kept. I think that's been resolved. We'll see more of this in action when the Anniversary Update starts rolling in two weeks. It's not possible to test out with the Insider Builds.
 
heatlesssun said:
They explicitly say they do not sell the information.
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I certainly hope you do not believe everything that microsoft tells you. It's been clear for a very long time that they are a predatory company, and have no qualms about doing whatever they want to make money. Which wouldn't be bad, except they screw so many things up for everyone else in the process. They will always find a way around the truth; perhaps they 'rent' the information, 'lease' the information, 'loan' the information (in return for who knows what), or 'license' the information. That way they don't technically 'sell' it.
 
Chaos Machine said:
Returning 6.4 billion dollars to shareholders via share buybacks and dividends doesn't help keep your company competitive when you are trying to transform yourself. All it does is artificially inflate your EPS and stock price, to the maximum benefit of management who are paid primarily in Stock options. When I see companies doing gigantic stock buybacks that tells me they have no idea what to do with their money. Big red flag for me.
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Who exactly do they need to compete with? I'm less concerned about buy backs and more concerned about how much they spent on LinkedIn.
 
nightfly said:
I certainly hope you do not believe everything that microsoft tells you.
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I think I'll take their word in this case over anonymous internet posters considering how much Microsoft would have to lose if they were lying. It's not a matter of trust, it's a matter of who has more to lose. And that's generally a better guarantee than simple trust.
 
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