On Jan. 26, Microsoft
- Its top-line growth was driven by strength in the server and tools segment -- which includes its SQL Server database product -- where revenue grew 14%.
- There was a net decline in operating income despite stronger sales, largely the result of an incrementally higher allocation of sales and marketing expenditures as a percentage of revenue.
- Net income was pushed higher by investment income (as a percentage of revenue) and a $0.01 tax benefit, resulting in a lower effective tax rate.
- On Thursday, the company offered rivals access to some source code for its Windows operating system, in an effort to comply with continuing European Union antitrust litigation. This bears watching, since similar actions might weaken Microsoft's grip on its markets.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q2 2006 |
Q2 2005 |
% Change |
|
|---|---|---|---|---|
|
Sales |
$11,960 |
$11,837 |
$10,818 |
+9.4% |
|
Net Profit |
-- |
$3,653 |
$3,463 |
+5.5% |
|
EPS |
$0.33 |
$0.34 |
$0.32 |
+6.3% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q2 2006 |
Q2 2005 |
Change |
|
|---|---|---|---|
|
Gross Margin |
81.08% |
82.67% |
-1.58% |
|
Op. Margin |
39.34% |
43.90% |
-4.56% |
|
Net Margin |
30.86% |
32.01% |
-1.15% |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q2 2006 |
Q2 2005 |
% Change |
|---|---|---|---|
|
Cash+ ST Invest. |
$34,701 |
$34,504 |
+0.6% |
|
Inventory |
$1,003 |
$304 |
+229.9% |
|
Accounts Rec. |
$7,758 |
$6,646 |
+16.7% |
|
Liabilities |
Q2 2006 |
Q2 2005 |
% Change |
|---|---|---|---|
|
Long-Term Debt |
- |
- |
N/A |
|
Accounts Pay. |
$2,477 |
$1,573 |
+57.5% |
Cash Flow Highlights
|
Q2 2006 |
Q2 2005 |
% Change |
|
|---|---|---|---|
|
Cash From Ops |
$2,231 |
$3,619 |
-38.4% |
|
Capital Expend. |
$318 |
$176 |
+80.7% |
|
Free Cash Flow |
$1,913 |
$3,443 |
-44.4% |
Find out why Fools always follow the money.
Related Companies:
-
IBM
(NYSE:IBM) -
Google
(NASDAQ:GOOG) -
Oracle
(NASDAQ:ORCL) -
Apple
(NASDAQ:AAPL) -
Intel
(NASDAQ:INTC)
Related Foolishness:
- What's to like about Microsoft, or not? Let us tell you.
- Between me, you, and the firewall. Or maybe not.
- The market loves Microsoft, loves it not.
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
Microsoft is a Motley Fool Inside Value recommendation. Philip Durell picks unloved, underappreciated companies for his newsletter, and if you subscribe to it or any other Motley Fool newsletter for one year, you'll get a copy of Stocks 2006 , our analysts' top picks, for free.
At the time of publication, Michael Olsen was neither long nor short any of the companies listed. Fool rules are here.
