On Jan. 24, software titan Microsoft
- The laggards in Microsoft's portfolio are the usual suspects: the entertainment and devices division grew sales at a tepid 3% compared to the year-ago quarter, and the online services segment doubled its loss from operations to $245 million.
- There is a silver lining for each underperformer, though. The online business reported 38% higher sales, and entertainment products like the Xbox 360 actually made a $357 million profit this time.
- All of that sort of drowns in the flood of cash that flows out of the Redmond machine, though. A 92% year-over-year EPS increase is no mean feat for a giant that juggles billions, not millions, in each hand.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q2 2008 |
Q2 2007 |
Change |
|
|---|---|---|---|
|
Sales |
$16,367 |
$12,542 |
30.5% |
|
Net Profit |
$4,707 |
$2,626 |
79.2% |
|
EPS |
$0.50 |
$0.26 |
92.3% |
|
Diluted Shares |
9,503.0 |
9,942.0 |
(4.4%) |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2008 |
Q2 2007 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
78.4% |
71.1% |
7.3 |
|
Operating Margin |
39.6% |
27.7% |
11.9 |
|
Net Margin |
28.8% |
20.9% |
7.9 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2008 |
Q2 2007 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$21,076 |
$26,400 |
(20.2%) |
|
Accounts Rec. |
$11,621 |
$9,895 |
17.4% |
|
Inventory |
$755 |
$1,725 |
(56.2%) |
|
Liabilities |
Q2 2008 |
Q2 2007 |
Change |
|---|---|---|---|
|
Accounts Payable |
$3,612 |
$2,944 |
22.7% |
|
Long-Term Debt |
$0 |
$0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2008 |
Q2 2007 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$4,567 |
$2,042 |
123.7% |
|
Capital Expenditures |
$695 |
$572 |
21.5% |
|
Free Cash Flow |
$3,872 |
$1,470 |
163.4% |
|
$4,493 |
$2,419 |
85.7% |
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap |
Trailing P/E Ratio |
CAPS Rating |
|
|---|---|---|---|
|
Microsoft |
$323,510 |
22.7 |
*** |
|
Apple |
$120,780 |
30.2 |
*** |
|
International Business Machines |
$147,900 |
14.8 |
*** |
|
Oracle |
$107,920 |
23.0 |
**** |
|
Adobe Systems |
$20,160 |
29.0 |
**** |
Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.
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