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Microsoft Reports Fourth-Quarter Results

Link: Microsoft Q3


Link: Microsoft Reports Record Fourth-Quarter Results

Microsoft Corp. today announced record fourth-quarter revenue of $16.04 billion for the quarter ended June 30, 2010, a 22% increase from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.93 billion, $4.52 billion and $0.51 per share, which represented increases of 49%, 48% and 50%, respectively, when compared with the prior year period.

- Microsoft shipped 1.5 million Xbox 360 consoles during the fourth quarter of fiscal year 2010, compared with 1.2 million Xbox 360 consoles during the fourth quarter of fiscal year 2009.

- EDD operating loss ($172 M) increased primarily reflecting increased operating expenses, offset in part by increased revenue. Cost of revenue increased $251 million or 38% primarily from charges resulting from the discontinuation of the KIN phone and increased royalty costs resulting from increased Xbox LIVE digital marketplace third-party content sales. Sales and marketing expenses increased $73 million or 29% primarily due to increased Xbox 360 platform marketing activities. Research and development expenses increased $48 million or 10%, primarily reflecting increased third-party development and programming costs and increased headcount-related expenses.

- Microsoft's fiscal year starts in July.


Xbox 360 Worldwide Hardware Unit Sales (Unit:Million)
Code:
                 Q1     Q2     Q3     Q4      FY

FY 2006          -      1.5    1.7    1.8     5.0   

FY 2007          1.0    4.4    0.5    0.7     6.6      

FY 2008          1.8    4.3    1.3    1.3     8.7  

FY 2009          2.2    6.0    1.7    1.2     11.1    

FY 2010          2.1    5.2    1.5    1.5     10.3


LTD Sales                                     41.7


Worldwide Hardware Unit Sales (Unit:Million)
Code:
Year Ended June 30,2010


          Q1     Q2     Q3     Q4     FY     

PS2       1.9    2.1    1.7     ?     5.7           

360       2.1    5.2    1.5    1.5    10.3   

PS3       3.2    6.5    2.2     ?     11.9    

Wii       3.5    11.3   3.5     ?     18.3


Microsoft's fiscal year starts in July,so

Q1 =( July-September)

Q2=(October- December)

Q3=(January-March)

Q4=(April-June)
 

Stumpokapow

listen to the mad man
The quote in the OP seems to suggest they lost about $80 million on Kin.

Withnail said:
So the 360 was outsold by the PS2 in Jan-Mar this year?

Outshipped--whether it was outsold depends on who stuffed the channels when--and worldwide, yes.
 

offshore

Member
Wonder if the increased operating expenses were because of the new 360. The current model looks more expensive to make than the old one, whereas the PS3 slim was the complete opposite :lol
 

FrankT

Member
14b6yr5.jpg


At 41.7 million WW they should be nearing 50 million by year end(where you at Speevy). Should easily beat the Q1 of last year and I would think beat the Q2. They could use a bit of cut then (two years it's due) which would likely get it up to the 08 levels(fiscal 09) although Kinect bundles might help with that.



offshore said:
Wonder if the increased operating expenses were because of the new 360. The current model looks more expensive to make than the old one, whereas the PS3 slim was the complete opposite :lol

Wondering the same as they could have ended with a bang up year. Perhaps not although Kin may have made for some of that. Still $679 million fiscal year net profit is by far the best they have ever had iirc.
 

Withnail

Member
Stumpokapow said:
The quote in the OP seems to suggest they lost about $80 million on Kin.



Outshipped--whether it was outsold depends on who stuffed the channels when--and worldwide, yes.

Fair enough, I was unsure whether it was shipped or sold but with it saying hardware unit sales I thought it must be sold. Could be Sony channel stuffing like you say. But still, aren't there usually loads of people on here saying Sony should kill the PS2 :lol
 

TheOddOne

Member
Jtyettis said:
At 41.7 million WW they should be nearing 50 million by year end.

Wondering the same as they could have ended with a bang up year. Still $670 million fiscal year net profit is by far the best they have ever had iirc.
This, quite surprising even.
 

AirBrian

Member
Parmenides said:
Link: Microsoft Q3


Link: Microsoft Reports Record Fourth-Quarter Results

Microsoft Corp. today announced record fourth-quarter revenue of $16.04 billion for the quarter ended June 30, 2010, a 22% increase from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.93 billion, $4.52 billion and $0.51 per share, which represented increases of 49%, 48% and 50%, respectively, when compared with the prior year period.

- Microsoft shipped 1.5 million Xbox 360 consoles during the fourth quarter of fiscal year 2010, compared with 1.2 million Xbox 360 consoles during the fourth quarter of fiscal year 2009.

- EDD operating loss ($172 M) increased primarily reflecting increased operating expenses, offset in part by increased revenue. Cost of revenue increased $251 million or 38% primarily from charges resulting from the discontinuation of the KIN phone and increased royalty costs resulting from increased Xbox LIVE digital marketplace third-party content sales. Sales and marketing expenses increased $73 million or 29% primarily due to increased Xbox 360 platform marketing activities. Research and development expenses increased $48 million or 10%, primarily reflecting increased third-party development and programming costs and increased headcount-related expenses.

- Microsoft's fiscal year starts in July.

Worldwide Hardware Unit Sales (Unit:Million)
I'm surprised that R&D is only up 10% versus last year Q4.
 

TTP

Have a fun! Enjoy!
Worldwide Hardware Unit Sales (Unit:Million)
Code:
Year Ended June 30,2010


          Q1     Q2     Q3     Q4     FY          

360       2.1    5.2    1.5    1.5    10.3   

PS3       3.2    6.5    2.2     ?     11.9

I was under the impression 360 was selling more than PS3 this year. I mean, I know this is ww so it tracks EU and Japanese sales too, but I tough those were not enough for even up with the US ones.

That 11.9 figure doesn't even include PS3 Q4 sales and still it's 1.6 more that the 360?

Or am I reading this wrong?
 

McHuj

Member
offshore said:
Wonder if the increased operating expenses were because of the new 360. The current model looks more expensive to make than the old one, whereas the PS3 slim was the complete opposite :lol

No way. The new box has a smaller supply, smaller mother board with less parts, and smaller chips. I bet it's significantly cheaper to make than the previous model.

Yes, one of the motivations of a new form factor is increased sales, buts it driven by cost cutting.
 

offshore

Member
Chris1964 said:
The real question is where Sony ships those PS2s.

Not to the UK that's for sure. I've been looking for a new one, but I can't find them. So I don't know why companies are bitching about second hand...you forced me to go second hand, Sony!

Code:
Year Ended June 30,2010


          Q1     Q2     Q3     Q4     FY     

PS2       1.9    2.1    1.7     ?     5.7           

360       2.1    5.2    1.5    1.5    10.3   

PS3       3.2    6.5    2.2     ?     11.9

This isn't right; Sony's next report is Q1 2010, as Sony sold 13 million from March 09 to 10, which is Sony's fiscal year.
 

Accident

Member
McHuj said:
No way. The new box has a smaller supply, smaller mother board with less parts, and smaller chips. I bet it's significantly cheaper to make than the previous model.

Yes, one of the motivations of a new form factor is increased sales, buts it driven by cost cutting.

Yep, looks like it's cheaper to make.

"Cost of revenue increased $240 million or 2%, primarily reflecting increased online costs and charges resulting from the discontinuation of the KIN phone, offset in part by decreased Xbox 360 console costs and reductions in other costs due to resource management efforts."
 

Rich!

Member
Chris1964 said:
The real question is where Sony ships those PS2s.

I saw lots and lots of brand new PS2 consoles for sale when I was in southern france a month ago. Super U and Intermarche both had them for sale - I'm fairly certain Carrefour did too.
 
TTP said:
Worldwide Hardware Unit Sales (Unit:Million)
Code:
Year Ended June 30,2010


          Q1     Q2     Q3     Q4     FY          

360       2.1    5.2    1.5    1.5    10.3   

PS3       3.2    6.5    2.2     ?     11.9

I was under the impression 360 was selling more than PS3 this year. I mean, I know this is ww so it tracks EU and Japanese sales too, but I tough those were not enough for even up with the US ones.

That 11.9 figure doesn't even include PS3 Q4 sales and still it's 1.6 more that the 360?

Or am I reading this wrong?

I'm not sure...Sony's fiscal year ends March 31...so I don't know what Q1, Q2, & Q3 those are.
 

szaromir

Banned
MS still beated Apple in revenues ($16.04B vs $15.7B), analysts expected Apple to beat MS last quarter for the first time in a loooooooooong time.

Losses are unexpected but it's interesting that they always seem to bleed money in April-June quarter, I wonder why.

No way. The new box has a smaller supply, smaller mother board with less parts, and smaller chips. I bet it's significantly cheaper to make than the previous model.
Add significantly smaller heatsinks, the cooling system is now much simpler and cheaper.

I'm surprised that R&D is only up 10% versus last year Q4.
What you should read into it is that they spent a whopping $538M on R&D!

I was under the impression 360 was selling more than PS3 this year.
Really? PS3 slim has been pretty big news since last September, were you really under that impression? 360S debuted in the last two weeks of the quarter and had only one shipment in one region (it debuted in July outside NA).
 

donny2112

Member
TTP said:
I was under the impression 360 was selling more than PS3 this year.

I don't think so. Slim has helped PS3 a lot.

TTP said:
Or am I reading this wrong?

Quite possibly. Only the last two are from calendar year 2010. It might be more straightforward to eschew fiscal years altogether and list the shipments by calendar year quarters.
 

TTP

Have a fun! Enjoy!
szaromir said:
Really? PS3 slim has been pretty big news since last September, were you really under that impression? 360S debuted in the last two weeks of the quarter and had only one shipment in one region (it debuted in July outside NA).

I was basing my assumption by looking at the NPD sales.
 

Serenity

Member
Why are their question marks for Q4 for nintendo and sony. Didn't they already report Q4 figures and total fiscal year figures. Suprising that even with only three quarters each on the chart they are both still ahead of 360.
 

FrankT

Member
TTP said:
I was basing my assumption by looking at the NPD sales.

US it has outsold it every month this year. Per the released Nintendo numbers for Europe and MC before June it wasn't making up the gap WW. Things have likely changed in the last month or so.

Serenity said:
Why are their question marks for Q4 for nintendo and sony. Didn't they already report Q4 figures and total fiscal year figures. Suprising that even with only three quarters each on the chart they are both still ahead of 360.

No they haven't released their numbers yet.
 

donny2112

Member
TTP said:
I was basing my assumption by looking at the NPD sales.

I haven't run the numbers, but I wouldn't be surprised if just looking at U.S. + Japan, it was a near dead heat through May. IIRC from Nintendo's graph, PS3 was selling above 360 weekly in Europe during that time frame, too.

Serenity said:
Why are their question marks for Q4 for nintendo and sony.

Parmenides decided to align Sony/Nintendo's years to Microsoft for comparison. Therefore "Q4' on that chart is actually Sony/Nintendo FY Q1.
 
offshore said:
This isn't right; Sony's next report is Q1 2010, as Sony sold 13 million from March 09 to 10, which is Sony's fiscal year.

Microsoft's fiscal year starts in July,so

Q1 =( July-September)

Q2=(October- December)

Q3=(January-March)

Q4=(April-June)


PlayStation®3 Worldwide Hardware Unit Sales (Unit: million)


Sony's (and Nintendo) fiscal year starts in April,so

Q1 =( April-June)

Q2=(July- September)

Q3=(October-December)

Q4=(January-March)

Parmenides decided to align Sony/Nintendo's years to Microsoft for comparison. Therefore "Q4' on that chart is actually Sony/Nintendo FY Q1.
This
 

Elios83

Member
szaromir said:
Even then, 360 has been outselling PS3 this year, but PS3 outsold 360 in September-December period.

Ummm no.
This year MS has sold/shipped 1.5m units in the January-March quarter while Sony has sold/shipped 2.2m units in the same quarter.
For the April to June quarter MS has sold 1.5m units, Sony will announce their results next thursday but you can expect sales in the 1.7-1.9m range. So no, Microsoft is losing ground on a worldwide level quarter by quarter.


And btw am I reading correctly?The EED division posted a 172m loss in the quarter due to the KIN flop and higher R&D,marketing and operative expenses?
 

donny2112

Member
Elios83 said:
This year MS has sold/shipped 1.5m units in the January-March quarter while Sony has sold/shipped 2.2m units in the same quarter.

Shipped
which is sold to the manufacturer but not in the minds of most people on this forum
. No reason to cause more confusion.

And as was discussed with last quarter's thread, the likely reason for the low 360 shipments is that they overshipped the previous quarter. Sales were likely higher than that as old stock was likely being burnt through.

Edit:
In actual sales, I still expect Sony to be higher in the quarter. Just pointing out the misleading nature of assuming the 1.5m shipped in CY Q1 was also what was sold.
 

Withnail

Member
Quite surprised that PS3 shipped (essentially the same as sold if you believe that there have been shortages) 1.6m more in three quarters than 360 did in four. Add in the Apr-Jun numbers for PS3 and we're probably looking at >3m difference compared to the 360 in the last 12 months.
 
Just a note to say I wont be updating my large financial results post any more. I nearly made the decision back when Sony reshuffled and came up with the new NP&D division... especially as it later became clear that although their PS business was profitable it wasn't reflected in the results of the division as a whole. The same went for Microsoft with Entertainment & Devices, especially now that we've seen Zune struggling, followed by the flop that is Kin. Not to mention that soon we'll have the Windows 7 phone sales screwing up the numbers too.

Just no point in doing it when there's little reflection on the gaming aspects of these divisions shown in the numbers. Someone else can feel free to take over from where I left off if they want to.
 

TTP

Have a fun! Enjoy!
Parmenides said:
Sony's (and Nintendo) fiscal year starts in April,so

Q1 =( April-June)

Q2=(July- September)

Q3=(October-December)

Q4=(January-March)

Ah, now that makes sense. Gotcha.
 

Saiyar

Unconfirmed Member
Have they said anything about software sales? They normally give an attach rate but I can't see it in the report or the PowerPoint presentation.
 

FrankT

Member
Saiyar said:
Have they said anything about software sales? They normally give an attach rate but I can't see it in the report or the PowerPoint presentation.

Don't see it. The US rate is either 8.9/9.0( I saw two figures on this when NPD reported so not sure) as of May iirc.

Losses are unexpected but it's interesting that they always seem to bleed money in April-June quarter, I wonder why.

Was thinking about that as well. Even with 3-4 years of fiscal profits now they always seem to end on a sour note each year. Got to be something to it.
 

Elios83

Member
donny2112 said:
Shipped which is sold to the manufacturer but not in the minds of most people on this forum. No reason to cause more confusion.

Just pointing out the misleading nature of assuming the 1.5m shipped in CY Q1 was also what was sold.

Yeah I said shipped/sold to mean that it depends on which perspective one wants to consider.
Personally I prefer to assume shipped as sold because even if they're not actual sales to customers, they're the most accurate figures we get (they're not statistic based like NPD or other trackers data) and if a company overships in a quarter they're gonna pay for it in the next quarter or viceversa so it's not like a company can bluff their true sales with overshipments forever (which is a reason why a lot of people seem to wrongly discredit official numbers coming from the companies).
 

Chris1964

Sales-Age Genius
Elios83 said:
Yeah I said shipped/sold to mean that it depends on which perspective one wants to consider.
Personally I prefer to assume shipped as sold because even if they're not actual sales to customers, they're the most accurate figures we get (they're not statistic based like NPD or other trackers data) and if a company overships in a quarter they're gonna pay for it in the next quarter or viceversa so it's not like a company can bluff their true sales with overshipments forever (which is a reason why a lot of people seem to wrongly discredit official numbers coming from the companies).
This theory works only for hardware, not software.
 

Elios83

Member
Chris1964 said:
This theory works only for hardware, not software.

Ahaha indeed, with software once retailers get tricked into buying more units than actually needed they're pretty much fucked and companies like Namco and Capcom have lived on that this generation :lol although there are some kind of return/refund policies to protect retailers I suppose.
 

Chris1964

Sales-Age Genius
Elios83 said:
Ahaha indeed, with software once retailers get tricked into buying more units than actually needed they're pretty much fucked and companies like Namco and Capcom have lived on that this generation :lol although there are some kind of return/refund policies to protect retailers I suppose.
Of course there are but you'll never see companies reporting them.
 

donny2112

Member
Dedication Through Light said:
lol, Im so confused, how are they claiming X360 sales are growing faster than the overall market in Q4 when there arent any other Q4 numbers from other companies provided?

Because Microsoft likes to use NPD numbers in their fiscal year reports, so they're only talking about industry growth as defined by NPD versus 360 growth as defined by NPD.

Elios83 said:
Personally I prefer to assume shipped as sold because even if they're not actual sales to customers, they're the most accurate figures we get (they're not statistic based like NPD or other trackers data) and if a company overships in a quarter they're gonna pay for it in the next quarter or viceversa so it's not like a company can bluff their true sales with overshipments forever (which is a reason why a lot of people seem to wrongly discredit official numbers coming from the companies).

For LTD totals (particularly after the system's been off the market for a few years), that's usually okay. It's when looking at individual quarters that assuming shipped=sold breaks down, as pointed out in your example. In real-time, current LTD sales will always be behind current LTD shipments, though.

Psychotext said:
Just a note to say I wont be updating my large financial results post any more. I nearly made the decision back when Sony reshuffled and came up with the new NP&D division... especially as it later became clear that although their PS business was profitable it wasn't reflected in the results of the division as a whole. The same went for Microsoft with Entertainment & Devices, especially now that we've seen Zune struggling, followed by the flop that is Kin. Not to mention that soon we'll have the Windows 7 phone sales screwing up the numbers too.

Just no point in doing it when there's little reflection on the gaming aspects of these divisions shown in the numbers. Someone else can feel free to take over from where I left off if they want to.

Add a note at the bottom? :p

Saiyar said:
Have they said anything about software sales? They normally give an attach rate but I can't see it in the report or the PowerPoint presentation.

That attach rate is consistently just the NPD tie ratio, so it's 9.0. There you go.
 

Saiyar

Unconfirmed Member
Chris1964 said:
Of course there are but you'll never see companies reporting them.

They would need to report it in some capacity, though obviously they will never say something as straight forward as "this quarter we bought back x units of game y". I am guessing the costs just get buried away somewhere.

donny2112 said:
That attach rate is consistently just the NPD tie ratio, so it's 9.0. There you go.

I thought they used to give out a WW attach rate, was it always just teh NPD number?
 

AirBrian

Member
Technosteve said:
Apple has to spend like 125 million for the free iphone bumpers, your telling me that costs more then the kin wow.
Are you sure about that $125M? That seems too high for cost and looks more like lost revenue.
 

donny2112

Member
Saiyar said:
I thought they used to give out a WW attach rate, was it always just teh NPD number?

It's consistently equaled the current NPD tie ratio, and with Microsoft's typical use of NPD stats without saying that it's specific to the U.S. market, it's pretty safe to just assume that it's the NPD tie ratio and not a worldwide number, yes. As such, we have no visibility into the worldwide shipments for software for the 360.

Psychotext said:
Eventually it would just be more notes than data. Bring back the good old days I say.

At least with Nintendo you know that it's 99% gaming. :D

The chart is going to still be asked for, even with all its warts. :)
 
AirBrian said:
Are you sure about that $125M? That seems too high for cost and looks more like lost revenue.

according to the earnings report they are deferring 175 million dollars in revenue due to giving away bumpers. So you were right, that's a lot of money from just bumpers. Poor kin they should of just marketed it as a Zune HD plus Friends type phone.
 

deepbrown

Member
TTP said:
Worldwide Hardware Unit Sales (Unit:Million)
Code:
Year Ended June 30,2010


          Q1     Q2     Q3     Q4     FY          

360       2.1    5.2    1.5    1.5    10.3   

PS3       3.2    6.5    2.2     ?     11.9

I was under the impression 360 was selling more than PS3 this year. I mean, I know this is ww so it tracks EU and Japanese sales too, but I tough those were not enough for even up with the US ones.

That 11.9 figure doesn't even include PS3 Q4 sales and still it's 1.6 more that the 360?

Or am I reading this wrong?

We've known the PS3 was far outselling the 360 worldwide just by looking at Sony's fiscal year. Where have you guys been?

If you look here...the PS3 had outsold the 360's three quarters with only two quarters (when you align PS3 sales with Microsoft's year)

http://www.playstationuniversity.com/ps3-and-xbox-360-gap-soon-to-be-just-4-million-3698/

"However, there’s something we’re not telling you. Sony has yet to announce it’s last quarter’s results, meaning that the Xbox 360’s numbers are made up of three fiscal quarters, compared to only two for the PS3. And as you can see the PS3 already leads by almost one-million units."

We knew that in April.
 

Jomjom

Banned
Hmm the difference between the PS3 and 360 worldwide seems pretty reasonable. From the mediacreate sales numbers the PS3 pretty consistently outsells the 360 by about 25k/week, so about 100k per month. With the exception of this past month, the 360 and PS3 sales in the US are usually pretty neck and neck.

I have no idea about the EU as a whole, but PS3 outsells the 360 there as well right?
 
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