Thursday, October 25, 2007

MSFT Conference Call Summary

Conference Call Summary:

On Q1 results co notes rapidly expanding personnel computer market, progress against software piracy, and three quarters of Windows customers adopting premium versions, drove Client rev to $4.1 bln. Server and Tools rev increased 16% to $2.9 bln, driven by strong annuity license growth in Windows Server and SQL Server. Online Services Business rev grew 25% to $671 mln, including $80 mln for the half quarter of aQuantive revs since close. Business Division rev grew 20% to $4.1 bln. Entertainment and Devices rev grew over 90% to $1.9 bln, driven by higher than expected console sales and Halo 3. The strong demand for Halo 3 generated ~$330 mln in revs in the quarter, Xbox 360 console units increased over 90%, with over 1.8 mln units sold... On Guidance: Co sees PC growth rate at 10-12% for FY08, 11-13% for the qtr. For Client segment, co says they expect full year growth to be 12-13% and Q2 growth to be 62-64%, or 13-14% excluding certain rev deferrals in the prior year. Co says Server and Tools rev should be up 16-18% for the year, and 15-17% for Q2. Co expects double-digit growth across their server platform products and services. They forecast rev in the Online Service business to increase 33-37% for the year, and 32-35% in Q2; implies Online advertising growth in excess of 30% for the quarter and for the year. Business Division revs should be up 14-15% for the year, and 31-33% in the second quarter. In the Entertainment and Devices Division they're forecasting rev growth of 15-20% for the full year, and flat to down 8% for Q2... Co says Vista adoption for premium SKUs is tracking above co's original consensus when launched. They say it's still early in the adoption cycle... Co did not disclose much on Facebook alliance... MSFT is trading at $35.42 in after hours.. Courtesy of

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