Just throwing that out there.

13 COMMENTS

  1. Maybe I’m reading this wrong and don’t know what I’m talking about, but Apple’s Q4 2010 profit was $4.31b versus Q4 2009’s $1.67b. That’s a 2.6x bump in profits, no?

  2. And Google saw the same revenue bump give or take.

    Why does Microsoft make the news? Because everyone has lower expectations of them.

    Hence the low P/E.

  3. Not the ratio of earnings to revenue, but market value to earnings. And I was suggesting that because only Microsoft makes the big headlines in spite of the apparent fact that Apple heavily trumped what yss recited, quarterly earnings year over year, and Google hit it more or less evenly (didn’t check full year, should do that) as a result of people expecting less of them, this performance being more of a surprise to them, as is reflected in the demand to own a stake in the company, the low P/E putting it in the league of … inexpensive stocks.

    Did that help?

  4. So… you think they’ll just hold a candle to Google within the cloud or soon turn into THE cloud company to turn to? After all, they made Office, man, they made it, instead of just supporting its prime formats just fine and doing a bunch of other sweet stuff so far pretty reliably and for a lot of people, some of whom doing important things with it.

  5. So did Nokia *sigh* and Ford. Revenue is usually high if you are a hardware company. Profit is what matters.

  6. I see what you’re up to here, Simmons.

    Skipping along, a question to the other readers to become relevant once someone offers some other headlining news: Which company would you rather be, the company that made a lot more revenue than the other company over the same time period or the company that improved relative to themselves a while ago?

  7. Here’s the real story:http://blog.seattlepi.com/microsoft/archives/226445.asp
    Microsoft profit jumped 51 percent year over year and recorded record first-quarter revenue during Q1 of its fiscal year 2011, the company said today, killing Wall Street estimates as skepticism surrounded Microsoft’s cash cows.

    Net income skyrocketed from $3.57 billion in Q1FY10 to $5.41 billion in the quarter ended Sept. 30, launched by strong sales of Windows 7 and Office 2010. Q1 was the first full quarter to include Office 2010 since its launch at the beginning of summer.

    Earnings per share were 62 cents, eclipsing the Wall Street consensus estimate of 55 cents.

    Quarterly revenue rose by 25 percent over the year-ago period to $16.2 billion, up from $12.9 billion in Q1 FY10. Even though the first quarter last year was a poor showing for Microsoft as it weathered the recession, Microsoft handily beat the Street’s estimate of $15.8 billion.

  8. “Microsoft sees $16.2 billion in Q1 net revenues, 25% increase year-over-year; Doug Simmons spreads negativity”

  9. I’m not clear on the argument. First it was comparing revenue of hardware company to the revenue of a software company. Then, the measure of success is the earnings growth, rather than the absolute earnings figure itself or the ratio of earnings to revenue (i.e., return on sales), etc.? Add to that, because MSFT, one of the most profitable companies in the world makes news, it is “because everyone has lower expectations of them”. Of course, the natural corollary to that argument is that Apple, on the other hand, makes new “because [insert whatever argument presents Apple in the most favorable light]”.

    Go get ’em Mr. Simmons.

  10. Don’t know much just that Microsoft is THE company to turn to when it comes to software. They produce a little thing called Office that is the staple of businesses and have a few products tied to the emerging market of the cloud.

    Something tells me that Microsoft is about to molly-whop the favorite fruit of your choice.

  11. MSFT is one of the largest and most fundamentally important companies on earth so, like it or not, it will make big headlines in spite of what Apple or any other company does. As for P/E, that’s a legitimate argument, albeit different from the blog headline. Ultimately, P/E is a measure of the market’s expectations of a company’s prospects over the long term. I have not studied Apple’s or MSFT’s or Google’s earnings, but qtr-over-qtr growth, that you’d cited earlier, is does not really win the argument. Not even y-o-y growth for that matter. These are data points to a larger argument.

    Also, when a company exceeds short term earnings expectations, be those expectations high or low, it causes investment analysts to take note and potentially revisit their long term expectations of the company’s prospects. But keep in mind, valuation is not a science (and I would argue not even an art, but simply a trade), which is why we can see companies with wildly high P/E (a la NFLX, or any tech company from 1995-1999) that may or may not ultimately achieve those expectations. Time will tell whether MSFT was a highly undervalued steal in 2010.

  12. @doug: please compare the same quarters… i respect your opinion, but please compare Apple’s 2011 Q1 to MS 2011 Q1… not Apple’s 2010 Q4 to MS 2011 Q1. Apple’s 2010 Q4 is definitely going to be inflated due to iPad. Though this quarter will most likely have the iPhone 4 inflate the revenue.

    But in saying this… xbox360 S will inflate MS’ as well, and technically any new product brought to the table is a legitimate way to increase the numbers. But there is also evidence that different sales trends occur in different quarters so that is why I ask you to compare the same quarters and not spout out previous figures like Apple (well Steve Jobs) did when it compared itself to RIM in their recent announcement.

  13. @Doug Simmons:

    Woah, partner. You do realize that the comment I made was Microsoft’s performance and your supposed feelings based on that performance? You just pulled a “well, my Daddy is bigger than yours!” card and now it’s taken a life of its own. My comment was: Microsoft did this; Doug (supposedly) did that. Nothing about Apple, Google, Pillow Pets, etc. Well, yes Pillow Pets.

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