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Microsoft's Annual Revenue Surpasses $50 Billion
Thursday July 19, 4:10 pm ET
Double-digit revenue and EPS growth fueled by Windows Vista and the 2007 Microsoft Office system
REDMOND, Wash., July 19 /PRNewswire-FirstCall/ -- Microsoft Corp. (Nasdaq: MSFT - News) today announced revenue of $13.37 billion for the quarter ended June 30, 2007, a 13% increase over the same period of the prior year. Diluted earnings per share for the quarter were $0.31. Excluding $0.08 of previously announced charges primarily related to Xbox 360(TM) warranty policies, earnings per share would have been $0.39, an increase of 26% over the same period of the prior year when also adjusted for certain items.
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(Logo: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO)
For the fiscal year ended June 30, 2007, Microsoft announced revenue of $51.12 billion, a 15% increase over the prior year. Diluted earnings per share for the year were $1.42. Excluding certain items, earnings per share would have been $1.49, an increase of 17% over the prior year when also adjusted for certain items. $31 billion in cash, or approximately 175% of operating cash flow, was returned to shareholders during the year through share buybacks and dividends.
"Surpassing $50 billion in annual sales is a testament to the innovation and value that our product groups delivered into the marketplace, as well as the outstanding execution by our field sales, marketing teams and partners to bring that value to life with our customers," said Kevin Turner, chief operating officer at Microsoft. "In fiscal year 2008, we will continue to drive growth through new product offerings, such as Windows Server® 2008, Visual Studio® 2008, SQL Server(TM) 2008, Office PerformancePoint(TM) Server 2007, and Microsoft Dynamics(TM) Live CRM."
This fiscal year marked the general availability of Microsoft's flagship products, Windows Vista® and the 2007 Microsoft Office system. Revenue growth was primarily driven by solid customer acceptance of these products, as well as increasing sales of existing products such as SQL Server, Windows Server, Visual Studio, and Xbox 360(TM) consoles.
"Our results this quarter cap off an extremely strong fiscal year for the company," said Chris Liddell, chief financial officer at Microsoft. "We have healthy core businesses and are strategically investing in growth opportunities, which will build on our success and contribute to continued double-digit revenue and earnings growth in fiscal year 2008."
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 $1.73.
The foregoing guidance does not include the impact of currently undetermined costs associated with Microsoft's acquisition of aQuantive, Inc., which is expected to close in the quarter ending September 30, 2007.
Webcast Details
Microsoft will hold an audio webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today with Chris Liddell, senior vice president and chief financial officer, Frank Brod, corporate vice president and chief accounting officer, and Colleen Healy, general manager of Investor Relations, to discuss details of the company's performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/msft. The webcast will be available for replay through the close of business on July 19, 2008.
Microsoft Corporation
Adjusted Financial Results - Non-GAAP Measures Reconciliation
Three Months Ended Three Months Ended Year over
June 30, 2007 June 30, 2006 Year
Growth
Diluted Diluted Diluted
Operating Net earnings Operating Net earnings earnings
income income per share income income per per
share share
($ in millions,
except per
share amounts)
As reported $3,989 $3,035 $0.31 $3,881 $2,828 $0.28 11%
Xbox 360(TM)
related
charges (a) $1,057 $749 $0.08
Legal
charges
(non-tax
deductible) $351 $351 $0.03
As adjusted $5,046 $3,784 $0.39 $4,232 $3,179 $0.31 26%
Twelve Months Ended Twelve Months Ended Year over
June 30, 2007 June 30, 2006 Year
Growth
Diluted Diluted Diluted
Operating Net earnings Operating Net earnings earnings
income income per share income income per per
share share
($ in millions,
except per
share amounts)
As reported $18,524 $14,065 $1.42 $16,472 $12,599 $1.20 18%
Xbox 360(TM)
related
charges (a) $1,057 $749 $0.08
Legal
charges $154 $105 $0.01 $758 $523 $0.05
Legal
charges
(non-tax
deductible) $351 $351 $0.03
Tax benefit ($195) ($0.02) ($108)($0.01)
As adjusted $19,735 $14,724 $1.49 $17,581 $13,365 $1.27 17%
(a) Charges primarily related to previously announced Xbox 360(TM)
warranty policies