The world's largest software company posted predictably bland quarterly results last night. Revenue inched 5% higher to nearly $20.9 billion, and operating profits and adjusted earnings inched marginally lower. However, aggressive share buybacks over the past year propped up earnings on a per-share basis to $0.78, just ahead of both the $0.77 it rang up a year earlier and the $0.76 that analysts were targeting.
There were no bombshells across Mr. Softy's five divisions. Its business division -- anchored by Office 2010 -- rose a modest 3%, while its server and tools software division came through with an 11% top-line spurt.
Windows watchers knew they'd be in for another soft quarter when sales tracker Gartner reported a 1.4% decline in global PC shipments during the fourth quarter. Unit leader and Microsoft cheerleader Hewlett-Packard
Well, now that Microsoft gets a chance to tell its side of the PC story, we see that its Windows and Windows Live revenue fell 6% during the period. Operating profits fell even harder in the division, but this should improve when Windows 8 is released later this year.
Losses are narrowing at Microsoft's online division, though the company's 10% increase in revenue pales in comparison with the 25% top-line pop at niche leader Google
That leaves us with Microsoft's Xbox business leading the way with a 15% revenue spurt. If someone would've told you a year ago that Xbox would be growing faster than Bing -- or a decade ago that a video game console would be outpacing operating-systems growth -- it would seem hard to believe.
Things should get less bland at this point. Nokia
I've been covering Microsoft since the 1990s, and I've generally had a lukewarm opinion as an investor. However, I entered a bullish CAPScall on Microsoft in Motley Fool CAPS earlier this month, reversing my earlier bearish pick. This is the first year in a long time where Microsoft is setting itself up to make a statement, and it should be one worth making.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns shares of Hewlett-Packard and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.