NASA breathed a sigh of relief today as its Mars Spirit rover sent data back to Earth for the first time in two days.

No one can say for sure what's gone wrong with the rover, but our crack Fool staff would like to point out that the problems on Mars began in tandem with Democratic presidential candidate Howard Dean's now-infamous " I Have a Scream" speech.

Could Dean's hollers on the night of the Iowa caucuses have reached all the way to Mars and fouled up the rover? Or is there something more sinister at work?

In other news, Captain Kangaroo died today. He was 76.

In today's Motley Fool Take:

Mighty Microsoft

By Bill Mann (TMF Otter)

For the first time yesterday, Microsoft(Nasdaq: MSFT) issued an earnings report that included stock-based compensation. And the results were pretty solid. Second-quarter revenues were substantially higher, showing a 19% leap from $8.5 billion to $10.2 billion. Earnings compared to the same quarter last year were down 17%, from $0.17 to $0.14.

I know what some of you are thinking. "I thought you just said that the results were strong! What's this about lower earnings?"

At this time last year, Microsoft was still awarding stock options to employees, which are not reported on the income statement due to a loophole in U.S. accounting standards. But this past summer, Microsoft elected to switch from the murky costs of stock options to the more definable restricted stock grants. This means that the company is able to tell exactly how much in stock compensation it is granting to its employees. For the quarter, that number was $2.17 billion, or about $0.20 per share.

This also means that the results for this quarter, when compared to those from a year ago, have a 20-cent weight on them. Part of this expense was the large conversion that Microsoft offered to employees. It isn't reasonable to expect that it will be paying out more than $2 billion in stock-based compensation each quarter. We hope. The company stated that $0.14 per share of that amount was due to the conversion.

So, the headlines you see that state "Microsoft Earnings Down" are proof positive that one should not invest by paying attention to headlines. Not that we divine tea leaves or anything, but I found it quite funny that immediately upon the release of the numbers, Microsoft's stock declined more than 2% (that's $6 billion), only to quickly rebound.

Nearly all of Microsoft's operating segments grew, led by its Office and Server suites. This is particularly interesting given the rise in open source software alternatives to Windows -- perhaps it's hurting Mr. Softy on the margins, but the harm certainly isn't apparent in gross revenues.

The biggest concern from this quarter's numbers lay in its deferred revenue accounts. Since Microsoft derives much of its revenues from subscriptions, it will consistently have been paid money by customers for services not yet rendered. These cannot be counted as earnings, so they're held aside as unearned or deferred revenues. Analysts use these numbers to divine the health of a company's subscription businesses. Microsoft's deferred revenue dropped by $768 million from a year ago, $395 million sequentially. Its management, though, stated in its conference call (courtesy of CCBN StreetEvents) that it feels "good about where we ended the quarter" regarding its deferred revenues.

Investors should take some comfort in the top-line growth, which was much higher than anticipated (quite a feat given the sheer size of $10 billion), but should be concerned about continued threats from open sourcing. Many companies have had their capital expenditure budgets on cold storage for the past three years, and Microsoft's results may be representative of a replacement cycle, rather than the old dependable upgrades.

Discussion Board of the Day: Microsoft

Would you be sweating bullets if your stock lost $6 billion in value at the drop of a hat? What do you think about Microsoft's move to put stock options on the books? Should the software giant be worrying about open source? Talk it out with other Fools on the Microsoft discussion board. Only on Fool.com.

Amgen's Engine

Amgen (Nasdaq: AMGN) shares got smacked around a bit at the end of Thursday's trading session, but it appears some reactionary investors hit the panic button too soon. The company missed analysts' expectations by a few pennies, but its fourth-quarter earnings showed an impressive increase in the revenues brought in by its drugs.

Part of the reason for the knee-jerk reaction -- resulting in the stock's 2% fall Thursday -- was an apparently inadvertent posting of earnings to the company's website, prior to the release of the press announcement and market close.

Amgen's quarterly earnings increased 20%, to $545.9 million, or $0.41 per share, from $456.4 million, or $0.34 a share, in the same quarter last year. Excluding charges and gains, earnings were $0.46 a share, compared to $0.35 a share, $0.02 shy of analysts' expectations. The miss was attributed to increased expenses -- mostly related to increased sales.

In its conference call (courtesy of CCBN StreetEvents), Amgen pointed to 58% product sales growth for the year. While a great showing in 2003 might cause some tough comparisons for 2004, Amgen has several possible revenue drivers up its sleeve.

First, Amgen hopes to gain FDA approval to market what is currently its rheumatoid arthritis drug Enbrel to psoriasis sufferers, a green light it hopes will blink this year. The company believes that 1 million people suffer from a moderate to severe form of the disease.

There's also cinacalcet, a drug for kidney disease that has shown promise, which Amgen hopes to have approved within the first half of 2004. If it gets the regulatory agency's OK, it will be the first medication in a new class of drugs, which could gear into quite an exciting revenue opportunity for the company.

The drug maker's been revving its engines for additional growth for quite some time, as discussed by fellow Fool Rick Munarriz last month, giving investors an exciting story to watch unfold. Today, its shares have risen 1%, as investors digested the news. Amgen may have delivered a "miss" last night, but when it comes to stacking up sales of its drugs, it's been hitting on all cylinders.

Quote of Note

"The best way out is always through." -- Robert Frost

EMC Buys Success

After a feast of mega-acquisitions, a company typically suffers indigestion. By all indications, EMC(NYSE: EMC) has been spared that fate -- at least judging by yesterday's earnings announcement.

What is even more remarkable is the degree to which the acquisitions have been transformative in propelling EMC, a hardware storage company, aggressively into software.

Clearly, IT customers want lifecycle management, not to rely on myriad vendors. The big players are scrambling to fill this need for integration. That means IBM(NYSE: IBM), Sun Microsystems(Nasdaq: SUNW), Hewlett-Packard(NYSE: HPQ), Microsoft(Nasdaq: MSFT) and increasingly, EMC.

Management calls it the "holy grail strategy," and EMC's quest has involved a series of strategic acquisitions -- Legato, Documentum, and Vmware, among them. (See EMC's Holy Grail for more on this.)

For all its success so far, EMC's strategy was a gamble, and there was a lot of initial skepticism. The payoff in the words of Bill Teuber, EMC's executive vice president and CFO: "For the year, we reached and exceeded every major financial goal we set at the start of 2003."

Living well is the best revenge, and so far, so good. Sure, a general uptick in IT spending has helped, but EMC has had a mighty big hand in its own comeback.

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